Building Your Down Payment

Many buyers can easily qualify for various loan programs, but they can't afford a large down payment. Below are a few straightforward ways to put together your down payment

Reduce expenses and save. Look for ways you can reduce your monthly expenditures to save toward a down payment. There are bank programs through which some of your paycheck is automatically placed into a savings account every pay period. Some practical ways to put together funds include moving into housing that is less expensive, and staying home for your family vacation this year.

Work more and sell items you don't need. Look for an additional job. This can be rough, but the temporary difficulty can help you get your down payment. Additionally, you can put together a comprehensive list of items you may be able to sell. Broken gold jewelry can be sold at local jewelry stores. You may have desirable items you can sell at an auction website, or quality household goods for a garage or tag sale. Also, you might want to think about selling any investments you own.

Borrow from your retirement plan. Check the parameters of your specific program. You can borrow funds from a 401(k) plan for a down payment or withdraw from an IRA. You will need to make sure you are knowledgable about any penalties, the effect this may have on your taxes, and repayment terms.

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

Learn about housing finance agencies. These agencies offer provisional loan programs to moderate and low income buyers, buyers interested in rehabilitating a residence in a particular area, and additional specific kinds of buyers as specified by each finance agency. With the help of this kind of agency, you can be given a below market interest rate, down payment help and other perks. These kinds of agencies may assist eligible buyers with a lower interest rate, help with your down payment, and offer other advantages. The principal purpose of non-profit housing finance agencies is build up the purchase of homes in certain places.

Research no-down and low-down mortgage loan programs.

  • Federal Housing Administration (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 assisting low and moderate-income individuals qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to private lenders, ensuring the buyers are eligible for financing. Down payment requirements for FHA loans are lower than those with typical mortgages, even though these loans come with current interest rates. Closing costs may be financed within the mortgage, while your down payment could be as low as 3% of the purchase price.

  • VA mortgages

    With a guarantee from the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This special loan requires no down payment, has mimimal closing costs, and offers a competitive interest rate. Even though the mortgage loans are not actually issued by the VA, the department certifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes with the first. Most of the time, the piggyback loan takes care of 10 percent of the purchase amount, while the first mortgage finances 80 percent. The homebuyer pays the remaining 10%, rather than having to pull together the typical 20% down payment.

  • Carry-Back loans

    In a "carry back" agreement, the seller agrees to loan you a portion of his home equity to help you with your down payment money. In this scenario, you would finance the majority of the purchase price with a traditional lending institution and borrow the remaining amount from the seller. Often, this form of second mortgage has a higher rate of interest.

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

Want to discuss down payments? Call us at 7184417000.

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Omni Mortgage Corp.

118-18 101st Avenue
Richmond Hill, NY 11419