Your Down Payment

Many buyers qualify for various loan programs, but they don't have a lot of money to pay a down payment. Here are a few ideas:

Tighten your belt and save. Be on the look-out for ways you can reduce your monthly expenses to save toward a down payment. There are bank programs in which some of your paycheck is automatically placed into a savings account every pay period. Some effective methods to put together funds include moving into less expensive housing, and staying home for your vacation for a year or two.

Work a second job and sell items you don't need. Perhaps you can get a second job to get your down payment money. In addition, you can put together a comprehensive inventory of items you may be able to sell. Broken gold jewelry can bring a good price from local jewelers. You might own collectibles you can put up for sale at an online auction, or quality household goods for a tag or garage sale. You can also research what any investments you own could sell for.

Borrow from retirement funds. Check the provisions of your specific plan. You can borrow money from a 401(k) plan for you down payment or withdraw from an IRA. Be sure to ask your plan representative about the tax ramifications, your obligation for repayment, and any early withdrawal penalties.

Ask for help from generous family members. Many buyers somtimes receive help with their down payment assistance from gracious family members who may be able to help get them in their own home. Your family members may be eager to help you reach the goal of buying your first home.

Learn about housing finance agencies. These agencies offer provisional mortgate loan programs to low and moderate-income buyers, buyers with an interest in sprucing up a house within a targeted part of the city, and other groups as specified by each finance agency. With the help of this kind of agency, you may get a below market interest rate, down payment assistance and other benefits. These types of agencies may assist eligible buyers with a reduced interest rate, help with your down payment, and provide other advantages. The primary mission of non-profit housing finance agencies is build up residence ownership in certain parts of the city.

Find out about low-down and no-down mortgage loan programs.

  • Federal Housing Administration (FHA) mortgages

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in aiding low and moderate-income families get mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who wish to qualify for home financing. FHA assists first-time buyers and others who might not be able to qualify for a traditional mortgage on their own, by offering mortgage insurance to the lenders. Down payment amounts for FHA loans are less than those for traditional mortgage loans, although these loans come with current interest rates. The required down payment can be as low as 3 percent while the closing costs can be packaged in the mortgage.

  • VA mortgage loans

    VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people can receive a VA loan, which typically offers a low interest rate, no down payment, and minimal closing costs. While it's true that the mortgages don't originate from the VA, the office certifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes with the first. In most cases the first mortgage is for 80% of the purchase amount and the "piggyback" funds 10%. The homebuyer pays the remaining 10%, rather than needing to pull together the usual 20% down payment.

  • Carry-Back loans

    We a seller carries back a second mortgage, the seller loans you part of his or her equity. You would finance the largest portion of the purchase price with a traditional mortgage lending institution and finance the remaining amount with the seller. Usually this form of second mortgage has a higher rate of interest.

The satisfaction will be the same, no matter which strategy you use to put together the down payment. Your brand new home will be well worth it!

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

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