Your Down Payment

Many folks who are looking to purchase a new home can easily qualify for several different kinds of mortgages, but they can't afford a large down payment. Below are a few straightforward ways to put together a down payment

Reduce expenses and save. Look for ways to reduce your monthly expenses 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 pay automatically transferred into savings. You might look into some big expenses in your budget that you can give up, or trim, at least temporarily. For example, you might move into less expensive housing, or stay local for your vacation.

Work more and sell items you don't need. Perhaps you can find an additional job to get your down payment money. Additionally, you can make an exhaustive inventory of things you can sell. Unused gold jewelry can bring a good amount from local jewelry stores. A closetful of small things could add up to a fair amount at a garage or tag sale. Also, you might want to look into selling any investments you own.

Borrow from retirement funds. Explore the specifics for your individual plan. It is possible to borrow money from a 401(k) plan for you down payment or perform a withdrawal from an Individual Retirement Account. Be sure you are clear about any penalties, the way this may affect on income taxes, and repayment obligation.

Request a generous gift from your family. Many homebuyers somtimes get help with their down payment help from caring family members who may be able to help them get into their first home. Your family members may be willing to help you reach the goal of having your first home.

Learn about housing finance agencies. Provisional mortgage programs are extended to homebuyers in specific situations, such as low income buyers or future homeowners planning to renovating houses in a certain part of town, among others. With the help of this type of agency, you may be given a below market interest rate, down payment help and other perks. Housing finance agencies can help you with a lower rate of interest, help with your down payment, and provide other benefits. These non-profit programs to promote the value of homes in specific places.

Learn about low-down and no-down mortgage loan programs.

  • Federal Housing Administration (FHA) mortgages

    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 aiding low to moderate-income buyers qualify for mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals who need to get mortgage loans. FHA offers mortgage insurance to the private lenders, helping the buyers to become eligible for a mortgage loan. Down payment sums for FHA mortgages are lower than those for conventional mortgage loans, although these loans have current interest rates. The down payment can go as low as 3 percent while the closing costs can be covered by the mortgage loan.

  • VA mortgage loans

    With a guarantee from the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This particular loan requires no down payment, has limited closing costs, and provides the benefit of a competitive rate of interest. While the mortgages are not actually issued by the VA, the office certifies borrowers by issuing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close at the same time as the first. Usually the piggyback loan is for 10 percent of the purchase amount, while the first mortgage covers 80 percent. Instead of the traditional 20 percent down payment, the buyer will just have to pull together the remaining 10 percent.

  • Carry-Back loans

    We a seller carries back a second mortgage, the you borrow a portion of the seller's home equity.. In this scenario, you would finance the majority of the purchase price with a traditional mortgage lender and finance the remainder with the seller. Usually you will pay a somewhat higher interest rate with the loan financed by the seller.

No matter how you gather your down payment funds, the satisfaction of reaching the goal of living in your own home will be just as great!

Want to discuss down payments? Give us a call at (786) 262-6486.

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