Building Your Down Payment

Many people who would like to purchase a new home can easily qualify for various loan programs, but they don't have a lot of money to pay a down payment. Get started here

Slash the budget and build up savings. Look for ways you can reduce your expenditures to set aside funds for a down payment. You might also try enrolling in an automatic savings plan at your bank to have a portion of your payroll automatically deposited into savings. Some effective ways to save additional funds include moving into less expensive housing, and staying home for your vacation this year.

Sell things you don't need and get a second job. Try to get a second job. This can be rough, but the temporary trial can help you get your down payment. Additionally, you can make a comprehensive list of items you can sell. Broken gold jewelry can bring a good amount from local jewelry stores. Maybe you own collectibles you can sell on an auction website, or household goods for a tag or garage sale. You can also research what your investments could bring if sold.

Borrow your down payment from your retirement plan. Research the specifics of your individual plan. You may borrow funds from a 401(k) for you down payment or make a withdrawal from an IRA. You will need to be sure you are clear about any penalties, the way this will affect on taxes, and repayment obligation.

Request a gift from family. Many homebuyers somtimes get help with their down payment assistance from gracious family members who are prepared to help them get into their own home. Your family members may be pleased at the chance to help you reach the milestone of owning your first home.

Contact housing finance agencies. Provisional loan programs are given to homebuyers in specific situations, such as low income homebuyers or buyers looking to improve houses in a certain place, among others. Financing with this type of agency, you probably will receive a below market interest rate, down payment assistance and other incentives. Housing finance agencies may assist you with a reduced interest rate, get you your down payment, and offer other benefits. These non-profit programs were formed to build up the value of homes in certain places.

Learn about low-down and no-down mortgages.

  • Federal Housing Administration (FHA) mortgages

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital part in helping low and moderate-income Americans get mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to private lenders, making the buyers eligible for a mortgage loan. Interest rates with an FHA mortgage are usually the current interest rate, while the down payment with an FHA mortgage will be below those of conventional loans. The required down payment may go as low as three percent and the closing costs could be included in the mortgage.

  • VA mortgage loans

    With a guarantee from the Department of Veterans Affairs, a VA loan assists service people and veterans. This particular loan requires no down payment, has reduced closing costs, and offers a competitive rate of interest. Even though the loans don't originate from the VA, the department verfifies borrowers by providing eligibility certificates.

  • Piggy-back loans

    You may fund your down payment through a second mortgage that closes with the first. Usually the piggyback loan is for 10 percent of the purchase price, and the first mortgage covers 80 percent. Instead of the traditional 20 percent down payment, the homebuyer will just have to cover the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" agreement, the seller agrees to loan you a piece of his own equity to assist you with your down payment funds. The buyer finances the highest percentage of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Usually you will pay a somewhat higher rate with the loan financed by the seller.

The feeling of accomplishment will be the same, no matter how you manage to come up with the down payment. Your brand new home will be well worth it!

Want to discuss down payment options? Give us a call at 3217777277.

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