Your Down Payment

Many buyers qualify for various loan programs, but they don't have a lot of money to put up the standard down payment. Here's where to get started

Reduce expenses and save. Be on the look-out for ways to trim your expenses to put away money for a down payment. Also, you can look into bank programs in which some of your take-home pay is automatically transferred into a savings account each pay period. You might look into some big expenses in your spending history that you can live without, or trim, at least temporarily. For example, you may move into less expensive housing, or stay close to home for your family vacation.

Work a second job and sell things you don't need. Look for an additional job. This can be rough, but the temporary difficulty can help you get your down payment. In addition, you can make a comprehensive inventory of items you may be able to sell. Unused gold jewelry can be sold at local jewelry stores. You may have collectibles you can sell on an auction website, or quality household items for a tag or garage sale. Also, you can look into selling any investments you own.

Tap into your retirement funds. Explore the details for your particular plan. You may pull out money from a 401(k) for you down payment or withdraw from an Individual Retirement Account. Be sure you understand about any penalties, the way this will affect on your taxes, and repayment obligation.

Ask for assistance from family members. Many homebuyers are often fortunate enough to receive help with their down payment help from thoughtful family members who may be willing to help them get into their first home. Your family members may be pleased to help you reach the milestone of buying your own home.

Contact housing finance agencies. Provisional mortgage loans are provided to homebuyers in specific situations, such as low income buyers or people looking to improve houses in a specific place, among others. With the help of a housing finance agency, you may receive an interest rate that is below market, down payment assistance and other benefits. These kinds of agencies can assist you with a reduced interest rate, help with your down payment, and offer other assistance. The principal goal of non-profit housing finance agencies is boosting residential ownership in particular areas.

Explore no-down and low-down mortgage loans.

  • FHA loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in aiding low and moderate-income families get mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals in getting home financing. FHA assists first-time buyers and others who may not be eligible for a conventional loan by themselves, by offering mortgage insurance to private lenders. Down payment sums for FHA loans are below those with traditional mortgages, even though these loans come with average rates of interest. Closing costs might be covered by the mortgage, while the down payment may be as low as 3% of the purchase price.

  • VA mortgage loans

    With a guarantee from the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This particular loan does not require a down payment, has mimimal closing costs, and provides the benefit of a competitive interest rate. Even though the VA doesn't actually provide the mortgages, it does issue a certificate of eligibility to qualify for a VA mortgage.

  • Piggy-back loans

    You may finance a down payment with a second mortgage that closes along with the first. In most cases the first mortgage covers 80% of the cost of the home and the "piggyback" is for 10%. The borrower covers the remaining 10%, rather than needing to pull together the typical 20% down payment.

  • Carry-Back loans

    In the case of a seller "carrying back a second mortgage," the you borrow a portion of the seller's home equity.. In this scenario, you would finance the majority of the purchase price with a traditional lending institution and finance the remaining amount with the seller. Typically you'll pay a slightly higher rate with the loan from the seller.

The satisfaction will be the same, no matter how you manage to come up with the down payment. Your new home will be your reward!

Need to talk about down payment options? Give us a call: 703.255-5810.

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