Building Your Down Payment

Many buyers qualify for several different kinds of mortgages, but they don't have much to put up the standard down payment. Want to look into getting a new house, but don't know how you should put together your down payment?

Slash the budget and build up savings. Turn your budget upside-down to find extra money to save for your down payment. You might also try enrolling in an automatic savings plan at your bank to automatically have a predetermined amount from your paycheck deposited into savings. You might look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. For example, you might decide to move into less expensive housing, or skip a family vacation.

Sell items you don't really need and find a second job. Maybe you can find a second job to get your down payment money. In addition, you can put together an exhaustive inventory of items you can sell. Unused gold jewelry can be sold at local jewelry stores. A closetful of small items may add up to a nice sum at a garage or tag sale. You could also research what any investments you own will bring if sold.

Borrow from your retirement funds. Check the provisions of your particular plan. Many people get down payment money by withdrawing what they need from their Individual Retirement Accounts or pulling funds out of 401(k) programs. Make sure you know about any penalties, the way this could affect on income taxes, and repayment obligation.

Ask for assistance from generous family members. Many buyers are often lucky enough to get help with their down payment assistance from gracious parents and other family members who are eager to help get them in their first home. Your family members may be eager to help you reach the goal of buying your first home.

Research housing finance agencies. These agencies offer special mortgage programs for moderate and low income homebuyers, buyers interested in rehabilitating a house in a specific part of the city, and additional particular types of buyers as specified by each agency. With the help of a housing finance agency, you can receive a below market interest rate, down payment help and other incentives. Housing finance agencies can assist you with a reduced rate of interest, get you your down payment, and offer other assistance. These non-profit agencies to build up the value of homes in certain areas.

Learn about low-down and no-down mortgage loans.

  • Federal Housing Administration (FHA) mortgages

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in aiding low to moderate-income buyers qualify for mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to private lenders, enabling new homebuyers who may not be eligible for a typical mortgage, to get a mortgage. Down payment sums for FHA loans are less than those of typical mortgages, although these loans hold average rates of interest. Closing costs might be covered by the mortgage, while the down payment could be as low as 3 percent of the purchase price.

  • VA loans

    VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people are eligible for a VA loan, which typically offers a low fixed interest rate, no down payment, and limited closing costs. While it's true that the mortgage loans aren't actually provided by the VA, the department verfifies borrowers by issuing eligibility certificates.

  • Piggy-back loans

    You may fund your down payment through a second mortgage that closes with the first. Usually the first mortgage covers 80% of the purchase amount and the "piggyback" funds 10%. Instead of the usual 20 percent down payment, the buyer just has to pull together the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" situation, the seller commits to lend you a piece of his own equity to help you get your down payment money. You would finance the majority of the purchase price with a traditional lending institution and finance the remaining amount with the seller. Usually you will pay a somewhat higher interest rate with the loan from the seller.

No matter your strategy of putting together your down payment, 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.

Got a Question?

Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.

Your Information
Your Question

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