Building Your Down Payment

Lots of buyers qualify for a mortgage loan, but they can't afford a large down payment. We have a few suggestions

Cut expenses and save. Scrutinize the budget to uncover ways you can cut expenses to go toward your down payment. Also, you can look into bank programs through which some of your paycheck is automatically transferred into a savings account every pay period. You might look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. For example, you might decide to move into less expensive housing, or stay close to home for your vacation.

Sell things you do not really need and get a second job. Perhaps you can find a second job to get your down payment money. You can also get serious about the possessions you actually need and the things you could be able to sell. Multiple small things might add up to a nice sum at a garage or tag sale. Also, you might want to think about selling any investments you hold.

Tap into your retirement funds. Investigate the provisions of your specific program. It is possible to take out funds from a 401(k) for you down payment or withdraw from an Individual Retirement Account. You will need to be sure you understand about any penalties, the way this will affect on taxes, and repayment obligation.

Ask for a gift from your family. First-time buyers somtimes get help with their down payment assistance from giving family members who are eager to help them get into their own home. Your family members may be pleased to help you reach the milestone of buying your own home.

Learn about housing finance agencies. These types of agencies provide special mortgate loan programs to low and moderate-income buyers, buyers interested in rehabilitating a residence within a targeted part of the city, and additional particular kinds of buyers as defined by each agency. With the help of this type of agency, you can be given a below market interest rate, down payment help and other advantages. These kinds of agencies can help you with a lower rate of interest, get you your down payment, and offer other benefits. These non-profit agencies exist to build up the value of homes in specific areas.

Find out about low-down and no-down mortgages.

  • FHA mortgages

    The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in helping low to moderate-income buyers qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA assists first-time buyers and others who may not be able to qualify for a typical mortgage loan by themselves, by offering mortgage insurance to the private lenders. Interest rates for an FHA mortgage typically feature the going interest rate, but the down payment amounts with an FHA loan will be below those of conventional loans. The down payment can be as low as 3 percent while the closing costs can be financed in the mortgage.

  • VA mortgage loans

    Guaranteed by the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This particular loan does not require a down payment, has reduced closing costs, and provides a competitive rate of interest. Even though the loans don't originate from the VA, the office verfifies applicants by providing eligibility certificates.

  • Piggy-back loans

    You may finance a down payment through a second mortgage that closes with the first. Usually the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. The homebuyer covers the remaining 10%, instead of come up with the usual 20% down payment.

  • Carry-Back loans

    In the case of the seller "carrying back a second mortgage," the you borrow a portion of the seller's home equity.. The buyer funds the majority of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Typically you'll pay a somewhat higher interest rate with the loan financed by the seller.

No matter your method of getting together your down payment money, the thrill of reaching the goal of living in your own home will be just as great!

Want to discuss your down payment? Give us a call: 718-441-7000.

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