Building Your Down Payment

Many folks who are looking to purchase a new house can qualify for several different kinds of mortgages, but they don't have much to pay a down payment. Want to look into getting a new home, but don't know how you should put together your down payment?

Slash the budget and build up savings. Turn your budget inside out to discover ways you can cut expenses to go toward your down payment. Also, you can look into bank programs in which a portion of your take-home pay is automatically placed into a savings account every pay period. Some effective approaches to save additional funds include moving into housing that is less expensive, and skipping your family vacation for a year or two.

Sell things you do not really need and find a part-time job. Try to get a second job. This can be rough, but the temporary trial can help you get your down payment. You can also seriously consider the possessions you really need and the things you can put up for sale. Multiple small items might add up to a fair amount at a garage or tag sale. Also, you might want to think about selling any investments you hold.

Tap into your retirement funds. Investigate the provisions of your specific plan. Some homebuyers get down payment money from withdrawing funds from Individual Retirement Accounts or borrowing from their 401(k) plans. Be sure you understand the tax consequences, repayment terms, and any penalties for withdrawing early.

Request a gift from your family. First-time buyers are sometimes lucky enough to receive down payment assistance from giving family members who are able to help get them in their own home. Your family members may be eager to help you reach the goal of buying your own home.

Research housing finance agencies. Provisional loan programs are offered to homebuyers in certain circumstances, such as low income homebuyers or buyers looking to remodel houses in a particular neighborhood, among others. With the help of a housing finance agency, you probably will receive an interest rate that is below market, down payment help and other incentives. These types of agencies can assist eligible buyers with a lower interest rate, get you your down payment, and offer other assistance. These non-profit agencies exist to boost the value of homes in particular areas.

Explore no-down and low-down mortgage loans.

  • FHA mortgage loans

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important role 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) assists individuals in getting mortgages. FHA offers mortgage insurance to private lenders, helping the buyers to become eligible for a loan. Down payment requirements for FHA loans are smaller than those of traditional mortgages, although these mortgages have average rates of interest. Closing costs can be covered by the mortgage, while your down payment may be as low as 3% of the total amount.

  • VA mortgage loans

    VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people are eligible for a VA loan, which usually offers a reasonable fixed rate of interest, no down payment, and limited closing costs. While the mortgage loans don't originate from the VA, the department verfifies borrowers by providing eligibility certificates.

  • Piggy-back loans

    You can finance your down payment using a second mortgage that closes at the same time as the first. Usually the piggyback loan is for 10 percent of the home's amount, and the first mortgage finances 80 percent. In contrast to the traditional 20 percent down payment, the buyer just has to pull together the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" mortgage, the seller commits to loan you part of his own equity to assist you with your down payment money. In this scenario, you would finance the majority of the purchase price with a traditional lending institution and borrow the remainder from the seller. Typically, this form of second mortgage has higher interest.

No matter your method of getting together down payment funds, the thrill of living in your own home will be just as great!

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

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