Building Your Down Payment

Many borrowers qualify for various loan programs, but they can't afford a large down payment. Get started here

Tighten your belt and save. Look for ways to trim your expenditures to save toward a down payment. You also might enroll in an automatic savings plan at your bank to have a percentage of your payroll automatically moved into savings. Some effective strategies to save additional funds include moving into less expensive housing, and staying local for your vacation this year.

Sell things you don't really need and find a second job. Look for a second job. This can be rough, but the temporary difficulty can provide your down payment money. In addition, you can put together a comprehensive inventory of things you may be able to sell. Unused gold jewelry can be sold at local jewelry stores. Multiple small items could add up to a nice sum at a garage or tag sale. You can also explore what your investments could bring if sold.

Borrow your down payment from a retirement plan. Investigate the provisions of your specific program. Many people get down payment money from withdrawing funds from their Individual Retirement Accounts or pulling funds out of their 401(k) programs. Be sure you understand the tax consequences, your obligation for repayment, and penalties for withdrawing early.

Ask for a generous gift from family. Many homebuyers are sometimes lucky enough to receive down payment help from thoughtful parents and other family members who are eager to help get them in their first home. Your family members may be eager to help you reach the goal of having your own home.

Learn about housing finance agencies. Provisional mortgage loans are offered to homebuyers in specific circumstances, like low income homebuyers or homebuyers looking to improve houses in a targeted neighborhood, among others. With the help of a housing finance agency, you can receive a below market interest rate, down payment help and other advantages. Housing finance agencies can assist eligible buyers with a reduced interest rate, help with your down payment, and provide other benefits. These non-profit agencies exist to boost community in certain places.

Learn about low-down and no-down mortgage loan programs.

  • Federal Housing Administration (FHA) loans

    The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays an important role in helping 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) assists homebuyers in getting mortgages. FHA offers mortgage insurance to private lenders, enabling homebuyers who might not be eligible for a conventional mortgage, to receive financing. Down payment totals for FHA mortgages are lower than those for typical mortgages, even though these mortgages come with average rates of interest. Closing costs might be covered by the mortgage, while your down payment can be as low as 3 percent of the total amount.

  • VA mortgage loans

    Guaranteed by the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This special loan does not require a down payment, has mimimal closing costs, and provides a competitive rate of interest. Although the VA does not actually finance the loans, it does issue a certificate of eligibility to qualify for a VA loan.

  • Piggy-back loans

    You can fund your down payment with a second mortgage that closes along with the first. Generally the piggyback loan takes care of 10 percent of the purchase amount, while the first mortgage covers 80 percent. In contrast to the traditional 20 percent down payment, the buyer just has to cover the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" mortgage, the seller agrees to lend you a portion of his own equity to help you with your down payment funds. In this scenario, you would borrow the largest portion of the purchase price from a traditional mortgage lending institution and finance the remaining amount with the seller. Often, this form of second mortgage will have higher interest.

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

Need to talk about the best options for down payments? Call us: 5626935048.

Got a Question?

Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.

Your Information
Your Question

Nationwide Home Loans

NMLS #238531| CA BRE #01017101

16211 Whittier Blvd.
Whittier, CA 90603