Putting Together Your Down Payment

Lots of people who would like to purchase a new home can qualify for several different kinds of mortgages, but they don't have a lot of money to put up the standard down payment. Want to look into getting a new house, but don't know how you should put 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 have a percentage of your pay automatically moved into a savings account. You might look into some big expenses in your budget that you can give up, or trim, at least temporarily. Here are a couple of examples: you may decide to move into less expensive housing, or skip a family vacation.

Work a second job and sell items you don't need. Look for a second job. This can be rough, but the temporary difficulty can help you get your down payment. You can also get creative about the items you could be able to sell. A closetful of small items might add up to a fair amount at a garage or tag sale. Also, you might want to consider selling any investments you own.

Borrow money from your retirement plan. Research the specifics for your particular plan. You may borrow funds from a 401(k) for you down payment or withdraw from an Individual Retirement Account. Be sure to ask your plan representative about the tax consequences, your obligation for repayment, and early withdrawal penalties.

Ask for help from generous family members. First-time buyers somtimes get help with their down payment help from gracious parents and other family members who may be prepared to help get them in their first home. Your family members may be inclined to help you reach the milestone of owning your own home.

Research housing finance agencies. These types of agencies extend provisional loan programs to low and moderate-income borrowers, buyers interested in remodeling a residence in a targeted part of the city, and other groups as specified by each agency. Financing with this type of agency, you may receive an interest rate that is below market, down payment help and other perks. Housing finance agencies can help you with a reduced interest rate, help with your down payment, and provide other assistance. The principal goal of not-for-profit housing finance agencies is to boost the purchase of homes in specific areas.

Learn about low-down and no-down mortgages.

  • Federal Housing Administration (FHA) mortgage loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in assisting low to moderate-income families get 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, enabling buyers who will not be eligible for a typical mortgage, to obtain a mortgage. Interest rates with an FHA mortgage are usually the market interest rate, but the down payment amounts with an FHA loan are lower than those of conventional loans. The required down payment can go as low as 3 percent and the closing costs could be covered by the mortgage loan.

  • VA mortgage loans

    VA loans are guaranteed by the Department of Veterans Affairs. Service persons and veterans can benefit from a VA loan, which usually offers a reasonable fixed rate of interest, no down payment, and limited closing costs. While the VA doesn't provide the loans, it does certify eligibility to apply for a VA loan.

  • Piggy-back loans

    You can finance a down payment through a second mortgage that closes along with the first. Most of the time, the piggyback loan is for 10 percent of the purchase amount, while the first mortgage finances 80 percent. The borrower pays the remaining 10%, rather than putting 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 home equity. In this scenario, you would finance the largest portion 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.

No matter how you gather your down payment, the thrill of owning your own home will be just as great!

Want to discuss the best options for down payments? Call us: 7184417000.

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Omni Mortgage Corp.

118-18 101st Avenue
Richmond Hill, NY 11419