Putting Together Your Down Payment

Lots of buyers can easily qualify for various loan programs, but they can't afford a large down payment. We have a few ideas

Reduce expenses and save. Scrutinize your budget to discover ways you can cut expenses to go toward your down payment. You might also try enrolling in an automatic savings plan to have a portion of your pay automatically moved into savings. You would be wise to look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. Here are a couple of examples: you may decide to move into less expensive housing, or skip a vacation.

Sell items you do not really need and get a part-time job. Look for a second job. This can be exhausting, but the temporary trial can provide your down payment money. Additionally, you can put together a comprehensive inventory of items you can sell. Unworn gold jewelry can bring a good amount from local jewelry stores. You may have collectibles you can sell on an auction website, or household items for a garage or tag sale. You could also explore what any investments you own may bring if sold.

Tap into your retirement funds. Check the provisions of your specific plan. Some people get down payment money by withdrawing funds from Individual Retirement Accounts or getting funds out of their 401(k) programs. Be sure you understand about any penalties, the way this will affect on taxes, and repayment terms.

Request a gift from family. Many buyers are sometimes fortunate enough to receive down payment assistance from caring parents and other family members who are prepared to help them get into their own home. Your family members may be pleased at the chance to help you reach the goal of having your first home.

Research housing finance agencies. These agencies offer provisional mortgage loans to moderate and low income borrowers, buyers with an interest in sprucing up a residence in a targeted part of the city, and other specific types of buyers as specified by each finance agency. Working through this type of agency, you can be given a below market interest rate, down payment help and other advantages. Housing finance agencies can help you with a reduced rate of interest, help with your down payment, and offer other assistance. These non-profit programs exist to boost home ownership in particular places.

Research no-down and low-down mortgages.

  • Federal Housing Administration (FHA) loans

    The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays a vital part in aiding low and moderate-income Americans get mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in getting home financing. FHA helps first-time homebuyers and others who may not be able to qualify for a typical mortgage by themselves, by offering mortgage insurance to the lenders. Interest rates with an FHA loan typically feature the market interest rate, while the down payment amounts with an FHA mortgage will be lower than those of conventional loans. The down payment can be as low as 3 percent and the closing costs may be covered by the mortgage loan.

  • VA mortgages

    With a guarantee from the Department of Veterans Affairs, a VA loan assists veterens and service people. This particular loan does not require a down payment, has mimimal closing costs, and provides a competitive interest rate. Even though the VA does not actually provide the mortgages, it does issue a certificate of eligibility to qualify for a VA mortgage.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close at the same time as the first. In most cases the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. Instead of the traditional 20 percent down payment, the buyer just has to pull together the remaining 10 percent.

  • Carry-Back loans

    We a seller carries back a second mortgage, the you borrow part of the seller's home equity.. The buyer finances the highest percentage of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Generally, this kind of second mortgage has a higher rate of interest.

No matter your strategy of putting together your down payment money, the satisfaction of reaching the goal of living in your own home will be just as great!

Need to talk about your down payment? Call us: 5626935048.

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