Your Down Payment

Lots of buyers qualify for various loan programs, but they can't afford a large down payment. Here's where you start

Tighten your belt and save. Be on the look-out for ways to reduce your expenses to set aside funds 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 moved into savings. Some practical strategies to put together funds include moving into a residence that is less expensive, and skipping a year's vacation.

Sell items you don't need and get a second job. Try to find a second job. This can be exhausting, but the temporary trial can provide your down payment money. You can also get creative about the items you may be able to sell. Maybe you have collectibles you can put up for sale at an auction website, or household items for a garage or tag sale. You could also explore what any investments you have may sell for.

Borrow from your retirement funds. Check the parameters of your retirement plan. Some homebuyers get down payment money by withdrawing what they need from Individual Retirement Accounts or taking funds out of 401(k) plans. Be sure to ask your plan representative about the tax ramifications, your obligation for repaying funds, and possible penalties for withdrawing early.

Request a generous gift from family. First-time homebuyers somtimes receive help with their down payment help from caring parents and other family members who are able to help them get into their first home. Your family members may be pleased to help you reach the milestone of having your own home.

Learn about housing finance agencies. Special mortgate loan programs are provided to homebuyers in certain situations, like low income purchasers or buyers looking to renovating houses in a specific neighborhood, among others. Working through a housing finance agency, you can get a below market interest rate, down payment assistance and other advantages. Housing finance agencies can assist you with a reduced interest rate, help with your down payment, and provide other assistance. These non-profit programs exist to promote home ownership in certain places.

Find out about low-down and no-down mortgage loan programs.

• 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 and moderate-income Americans qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time buyers and others who might not be able to qualify for a traditional mortgage loan on their own, by providing mortgage insurance to the lenders. Down payment totals for FHA mortgages are smaller than those for typical mortgage loans, although these mortgages have average interest rates. The required down payment can be as low as 3 percent while the closing costs can 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 receive a VA loan, which usually offers a reasonable rate of interest, no down payment, and minimal closing costs. Although the mortgages aren't actually provided by the VA, the department verfifies applicants by providing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes with the first. Generally the piggyback loan is for 10 percent of the home's amount, and the first mortgage covers 80 percent. The homebuyer covers the remaining 10%, instead of putting the usual 20% down payment.

• Carry-Back loans

  In a "carry back" agreement, the seller agrees to loan you part of his own equity to help you get your down payment money. The buyer funds most of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Usually this type of second mortgage will have higher interest.

Need to talk about down payment options? Call us at 5122916100.