Your Down Payment

Many buyers qualify for several different kinds of mortgages, but they can't afford a large down payment. Do you want to look into getting a new house, but don't know how to get together a down payment?

Tighten your belt and save. Be on the look-out for ways to reduce your expenditures to put away money for a down payment. You could also try enrolling in an automatic savings plan at your bank to have a portion of your payroll automatically transferred into savings. You might look into some big expenses in your budget that you can live without, or reduce, at least temporarily. For example, 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. Maybe you can get an additional job and save your earnings. Additionally, you can put together a comprehensive inventory of things you may be able to sell. Unused gold jewelry can bring a good amount from local jewelry stores. Multiple small things may add up to a nice sum at a garage or tag sale. You might also explore what your investments may bring if sold.

Borrow money from a retirement plan. Investigate the parameters of your retirement program. It is possible to pull out funds from a 401(k) for you down payment or make a withdrawal from an Individual Retirement Account. Make sure you understand about any penalties, the effect this could have on taxes, and repayment terms.

Ask for a gift from your family. First-time homebuyers are sometimes fortunate enough to receive down payment help from thoughtful family members who are willing to help them get into their first home. Your family members may be pleased to help you reach the goal of having your own home.

Contact housing finance agencies. Special mortgage loans are extended to homebuyers in certain circumstances, like low income homebuyers or future homeowners planning to remodel houses in a specific area, among others. With the help of this type of agency, you probably will be given an interest rate that is below market, down payment help and other perks. These types of agencies may assist eligible homebuyers with a lower rate of interest, get you your down payment, and provide other benefits. These non-profit programs were formed to build up home ownership in specific neighborhoods.

Research no-down and low-down mortgage loan programs.

  • 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 part in helping low and moderate-income individuals get mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA aids first-time homebuyers and others who might not be eligible for a typical mortgage loan by themselves, by offering mortgage insurance to the lenders. Down payment requirements for FHA mortgages are smaller than those of conventional mortgage loans, although these mortgages come with current interest rates. The required down payment may go as low as 3 percent while the closing costs may be covered by the mortgage.

  • VA mortgage loans

    VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people can benefit from a VA loan, which generally offers a reasonable fixed rate of interest, no down payment, and minimal closing costs. While the mortgage loans don't originate from the VA, the department verfifies applicants by providing eligibility certificates.

  • Piggy-back loans

    You may fund a down payment using a second mortgage that closes along with the first. Generally the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. The homebuyer pays the remaining 10%, rather than having to put together the typical 20% down payment.

  • Carry-Back loans

    In the case of a seller "carrying back a second mortgage," the seller loans you part of his or her home equity. The buyer funds the majority of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Usually this type of second mortgage will have higher interest.

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

Want to discuss your down payment? Call us: (904) 342-3622.

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2800 North Fifth Street Suite 301B
St. Augustine, FL 32084