Putting Together Your Down Payment

Lots of borrowers qualify for several different kinds of mortgages, but they don't have a large sum of cash to put up a down payment. Get started here

Tighten your belt and save. Turn your budget inside out to discover extra money to save for your down payment. You could also try enrolling in an automatic savings plan at your bank to have a percentage of your pay automatically moved into your 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 move into less expensive housing, or skip a vacation.

Work a second job and sell items you don't need. Perhaps you can find an additional job to get your down payment money. In addition, you can make an exhaustive inventory of items you may be able to sell. Unused gold jewelry can bring a good amount from local jewelry stores. Multiple small items may add up to a nice sum at a garage or tag sale. You might also look into what your investments may sell for.

Borrow from retirement funds. Check the parameters of your retirement program. You may borrow funds from a 401(k) for you down payment or get a withdrawal from an IRA. Be sure you understand the tax ramifications, your obligation for repaying the money, and any early withdrawal penalties.

Ask for a gift from family. Many buyers somtimes receive help with their down payment assistance from giving parents and other family members who are eager to help get them in their first home. Your family members may be pleased at the chance to help you reach the milestone of buying your first home.

Contact housing finance agencies. These agencies provide provisional mortgage loans for moderate and low income borrowers, buyers interested in renovating a home in a specific part of the city, and additional groups as specified by the agency. With the help of this kind of agency, you may get an interest rate that is below market, down payment assistance and other perks. These types of agencies may help eligible buyers with a lower interest rate, get you your down payment, and provide other advantages. The principal mission of not-for-profit housing finance agencies is to promote the purchase of homes in certain places.

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 and moderate-income Americans qualify for mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers in getting mortgage loans. FHA provides mortgage insurance to private lenders, enabling buyers who might not be eligible for a traditional loan, to get a mortgage. Interest rates for an FHA mortgage are typically the market interest rate, while the down payment for an FHA loan will be lower than those of conventional loans. The down payment can be as low as three percent and the closing costs may be financed in the mortgage.

  • VA mortgages

    With a guarantee from the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This specialized loan requires no down payment, has mimimal closing costs, and offers a competitive interest rate. Although the VA doesn't issue the loans, it does certify eligibility to qualify for a VA mortgage.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close with the first. Most of the time, the piggyback loan takes care of 10 percent of the home's amount, and the first mortgage covers 80 percent. Rather than the usual 20 percent down payment, the homebuyer just has to pull together the remaining 10 percent.

  • Carry-Back loans

    In the case of the seller "carrying back a second mortgage," the seller loans you part of his or her equity. In this scenario, you would finance the largest portion of the purchase price with a traditional mortgage lender and borrow the remaining amount from the seller. Typically you will pay a somewhat higher rate with the loan financed by the seller.

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

Need to talk about down payment options? Call us at 5626935048.

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