Your Down Payment

Lots of buyers qualify for various loan programs, but they don't have much to put up the standard down payment. Here's where you start

Slash your budget and build up savings. Be on the look-out for ways you can trim your monthly expenditures to set aside money for a down payment. Also, you can look into bank programs in which some of your take-home pay is automatically placed into a savings account every pay period. Some effective ways to build up funds include moving into housing that is less expensive, and skipping your family vacation for a year or two.

Sell items you don't really need and find a second job. Maybe you can find an additional job to get your down payment money. You can also get creative about the things you may be able to put up for sale. You might own desirable items you can put up for sale on an online auction, or household goods for a tag or garage sale. Also, you can consider selling any investments you own.

Borrow from your retirement funds. Check the provisions of your specific plan. It is possible to borrow funds from a 401(k) for a down payment or withdraw from an IRA. Make sure you know about any penalties, the way this may affect on taxes, and repayment terms.

Ask for assistance from generous members of your family. First-time buyers somtimes get down payment help from gracious family members who are able to help get them in their first home. Your family members may be happy at the chance to help you reach the goal of buying your first home.

Contact housing finance agencies. These agencies provide special mortgage loans to low and moderate-income buyers, buyers with an interest in rehabilitating a residence in a particular area, and additional particular kinds of buyers as specified by the agency. With the help of this type of agency, you probably will be given a below market interest rate, down payment assistance and other benefits. These kinds of agencies may assist eligible buyers with a lower interest rate, help with your down payment, and offer other advantages. These non-profit programs to promote community in certain areas.

Learn about low-down and no-down mortgage loans.

  • Federal Housing Administration (FHA) mortgages

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in helping low to moderate-income individuals qualify for mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in qualifying for mortgages. FHA offers mortgage insurance to the private lenders, enabling homebuyers who may not be eligible for a typical mortgage loan, to obtain financing. Interest rates with an FHA loan normally feature the market interest rate, but the down payment for an FHA loan are lower than those of conventional loans. Closing costs might be covered by the mortgage, while your down payment might be as low as 3 percent of the purchase price.

  • VA mortgages

    VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people can receive a VA loan, which usually offers a low fixed interest rate, no down payment, and minimal closing costs. Although the loans don't originate from the VA, the department verfifies borrowers by providing eligibility certificates.

  • Piggy-back loans

    You may finance a down payment with a second mortgage that closes at the same time as the first. Most of the time, the piggyback loan takes care of 10 percent of the home's amount, while the first mortgage finances 80 percent. The borrower pays the remaining 10%, rather than come up with the usual 20% down payment.

  • Carry-Back loans

    In a "carry back" situation, the seller agrees to loan you some of his home equity to assist you with your down payment funds. In this scenario, you would borrow the majority of the purchase price from a traditional mortgage lending institution and finance the remainder with the seller. Usually you will pay a somewhat higher rate with the loan from the seller.

The satisfaction will be the same, no matter which method you use to pull together your down payment. Your new home will be worth it!

Need to talk about the best options for down payments? Give us a call: (478) 746-2063.

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