Your Down Payment

Lots of folks who would like to buy a new home qualify for various loan programs, but they don't have a large sum of cash to put up the standard down payment. Here are a few ways to put together your down payment

Reduce expenses and save. Be on the look-out for ways to 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 placed into savings each pay period. You would be wise to look into some big expenses in your budget that you can do without, or trim, at least temporarily. Here are a couple of examples: you might move into less expensive housing, or stay close to home for your family vacation.

Work a second job and sell items you do not need. Try to find a second job. This can be rough, but the temporary trial can provide your down payment money. You can also get creative about the things you may be able to put up for sale. You might own desirable items you can put up for sale on an online auction, or household items for a tag or garage sale. You can also research what your investments may sell for.

Borrow from your retirement funds. Research the specifics of your individual plan. Many homebuyers get down payment money from withdrawing from their Individual Retirement Accounts or borrowing from their 401(k) plans. Make sure you know about any penalties, the way this may affect on taxes, and repayment terms.

Request a gift from family. Many homebuyers somtimes get help with their down payment assistance from gracious parents and other family members who are anxious 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 mortgate loan programs- for moderate and low income homebuyers, buyers interested in sprucing up a home in a targeted area, and additional specific kinds of buyers as defined by each agency. With the help of this type of agency, you can get a below market interest rate, down payment assistance and other incentives. Housing finance agencies can help eligible homebuyers with a lower rate of interest, get you your down payment, and offer other benefits. These non-profit agencies were established to boost community in certain neighborhoods.

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

  • Federal Housing Administration (FHA) mortgage loans

    The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays a significant role in assisting low to moderate-income buyers get mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers in getting mortgages. FHA assists first-time homebuyers and others who may not be eligible for a conventional mortgage by themselves, by providing mortgage insurance to lenders. Down payment totals for FHA loans are smaller than those with typical mortgage loans, even though these loans hold average rates of interest. Closing costs may be included in the mortgage, while your down payment may be as low as 3 percent of the total.

  • VA mortgages

    VA loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans qualify for a VA loan, which usually offers a competitive fixed rate of interest, no down payment, and reduced closing costs. Even though the VA does not provide the mortgages, it does issue a certificate of eligibility to apply for a VA mortgage.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close along with the first. Most of the time, the piggyback loan takes care of 10 percent of the home's amount, while the first mortgage finances 80 percent. The homebuyer pays the remaining 10%, rather than needing to pull together the typical 20% down payment.

  • Carry-Back loans

    With a carry-back mortgage, the seller loans you part of his or her home equity. In this scenario, you would borrow the largest portion of the purchase price from a traditional lending institution and finance the remainder with the seller. Typically you will pay a slightly higher rate with the loan from the seller.

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

Need to talk about your down payment? Call us: 3149139678.


Bob Rutledge Mortgage

Loan Officer NMLS#: 297044

New American Funding 12321 Olive Blvd, ste 150
St. Louis, MO 63141