Your Down Payment

Many buyers qualify for a loan, but they don't have a large sum of cash to put up a down payment. We have a few ideas

Slash the budget and build up savings. Look for ways you can reduce your monthly expenditures to save toward a down payment. Also, you can look into bank programs through which some of your take-home pay is automatically deposited into a savings account every pay period. You would be wise to look into some big expenses in your spending history that you can give up, or trim, at least temporarily. For example, you might move into less expensive housing, or stay close to home for your annual vacation.

Sell things you don't really need and get a second job. Maybe you can get a second job to get your down payment money. You can also get serious about the possessions you actually need and the things you can sell. Maybe you have desirable items you can put up for sale on an auction website, or household items for a tag or garage sale. You could also explore what your investments could bring if sold.

Tap into retirement funds. Research the details of your individual plan. Some people get down payment money by withdrawing what they need from IRAs or borrowing from their 401(k) programs. Make sure you comprehend the tax ramifications, your obligation for repayment, and any early withdrawal penalties.

Request a generous gift from family. Many homebuyers somtimes get help with their down payment help from giving family members who are eager to help get them in their first home. Your family members may be willing to help you reach the goal of owning your own home.

Contact housing finance agencies. These agencies provide provisional mortgate loan programs- for low and moderate-income borrowers, buyers interested in sprucing up a house within a specific part of the city, and other groups as specified by each finance agency. With the help of this type of agency, you probably will receive a below market interest rate, down payment help and other perks. These types of agencies may assist eligible homebuyers with a reduced interest rate, get you your down payment, and offer other benefits. The main goal of non-profit housing finance agencies is to promote residential ownership in specific parts of the city.

Explore no-down and low-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 a significant role in helping low to moderate-income buyers get mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to the private lenders, enabling buyers who might not be eligible for a traditional mortgage, to receive financing. Down payment requirements for FHA mortgages are lower than those for typical mortgages, although these mortgages hold current rates of interest. Closing costs can be covered by the mortgage, and your down payment may be as low as 3 percent of the purchase price.

  • VA loans

    With a guarantee from the Department of Veterans Affairs, a VA loan assists veterens and service people. This special loan does not require a down payment, has limited closing costs, and provides a competitive rate of interest. Even though the VA doesn't provide the mortgage 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. Generally the piggyback loan takes care of 10 percent of the purchase amount, while the first mortgage covers 80 percent. Instead of the traditional 20 percent down payment, the homebuyer will just have to cover the remaining 10 percent.

  • Carry-Back loans

    With a carry-back mortgage, the seller loans you part of his or her equity. You would borrow the majority of the purchase price from a traditional lending institution and borrow the remaining amount from the seller. Often, this form of second mortgage will have higher interest.

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

Need to talk about the best options for down payments? Call us at (904) 342-3622.

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