Putting Together Your Down Payment

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Many borrowers can easily qualify for several different kinds of mortgages, but they don't have a lot of cash to pay a down payment. Here are a few straightforward ways to get together a down payment

Tighten your belt and save. Scrutinize the budget to discover ways you can cut expenses to save for your down payment. You also might enroll in an automatic savings plan to automatically have a specific amount from your paycheck moved into savings. Some practical ways to put together funds include moving into housing that is less expensive, and staying home for your family vacation this year.

Sell items you don't need and find a part-time job. Look for a second job. This can be rough, but the temporary trial can provide your down payment money. In addition, you can make a comprehensive list of things you may be able to sell. Unworn gold jewelry can bring a good price from local jewelry stores. A closet full of small things might add up to a nice sum at a garage or tag sale. You might also look into what any investments you hold will bring if sold.

Tap into your retirement funds. Check the parameters of your retirement program. It is possible to take out funds from a 401(k) for your down payment or get a withdrawal from an Individual Retirement Account. Make sure you understand the tax ramifications, your obligation for repayment, and any early withdrawal penalties.

Ask for a gift from family. First-time homebuyers sometimes get help with their down payment assistance from caring parents and other family members who are eager to help them get into their own home. Your family members may be eager to help you reach the milestone of buying your first home.

Contact housing finance agencies. Provisional mortgage programs are provided to homebuyers in certain circumstances, such as low income buyers or homebuyers looking to remodel houses in a specific area, among others. Working through this kind of agency, you may receive a below market interest rate, down payment assistance and other perks. These kinds of agencies can help you with a lower interest rate, get you your down payment, and offer other benefits. The main purpose of not-for-profit housing finance agencies is to promote residential ownership in certain areas.

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

  • Federal Housing Administration (FHA) loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital part in assisting low to moderate-income buyers qualify for mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get financing. FHA provides mortgage insurance to private lenders, ensuring the buyers are eligible for financing. Down payment requirements for FHA loans are lower than those for conventional mortgages, although these loans have current interest rates. Closing costs may be covered by the mortgage, while your down payment could be as low as 3.5% of the total amount.

  • VA loans

    With a guarantee from the Department of Veterans Affairs, a VA loan assists veterans and service people. This specialized loan does not require a down payment, has reduced closing costs, and offers a competitive interest rate. Although the mortgage loans don't originate from the VA, the office certifies borrowers by providing eligibility certificates.

  • Piggy-back loans

    You may fund your down payment through a second mortgage that closes at the same time as the first. Usually the first mortgage covers 80% of the purchase amount and the "piggyback" funds 10%. Instead of the traditional 20 percent down payment, the homebuyer will just have to pull together the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" agreement, the seller agrees to loan you some of his home equity to help you get your down payment money. The buyer funds the highest percentage of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Usually this type of second mortgage has higher interest.

The satisfaction will be the same, no matter how you manage to pull together the down payment. Your brand new home will be your reward!
Want to discuss down payments? Call us: 727-466-4301.

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Marc Moser / NMLS# 232625

Licensed in Florida

2451 N. McMullen Booth Rd. Ste. 306
Clearwater, FL 33759