Your Down Payment

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Lots of borrowers can qualify for a mortgage loan, but they can't afford a large down payment. Do you want to look into getting a new house, but don't know how you should get together your down payment?

Tighten your belt and save. Be on the look-out for ways you can reduce your monthly expenditures to set aside funds for a down payment. Also, you can look into bank programs in which some of your take-home pay is automatically placed into a savings account every pay period. You would be wise to look into some big expenses in your budget that you can live without, or trim, at least temporarily. Here are a couple of examples: you might decide to move into less expensive housing, or stay local for your family vacation.

Sell items you don't need and get a second job. Try to get an additional job. This can be rough, but the temporary difficulty can provide your down payment money. You can also get serious about the possessions you really need and the items you could be able to sell. Maybe you have desirable items you can sell at an online auction, or household goods for a tag or garage sale. Also, you might want to look into selling any investments you own.

Borrow from your retirement funds. Investigate the parameters of your particular program. You may take out funds from a 401(k) for a down payment or make a withdrawal from an Individual Retirement Account. Be sure you know about any penalties, the way this may affect on your taxes, and repayment obligation.

Ask for help from generous family members. First-time buyers sometimes receive help with their down payment assistance from caring 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 having your first home.

Learn about housing finance agencies. These types of agencies offer special mortgage loans to moderate and low income homebuyers, buyers with an interest in rehabilitating a house in a specific area, and other groups as defined by each finance agency. Financing with this kind of agency, you probably will receive a below market interest rate, down payment help and other benefits. Housing finance agencies may help eligible buyers with a lower interest rate, get you your down payment, and offer other assistance. The principal purpose of non-profit housing finance agencies is promoting the purchase of homes in specific areas.

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

  • FHA mortgage loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in helping low to moderate-income buyers qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in qualifying for home financing. FHA provides mortgage insurance to private lenders, ensuring the buyers are eligible for a home loan. Down payment sums for FHA loans are smaller than those for traditional mortgage loans, although these loans hold average rates of interest. The down payment can be as low as 3 percent while the closing costs could be covered by the mortgage.

  • VA mortgage loans

    With a guarantee from the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This special loan does not require a down payment, has reduced closing costs, and provides a competitive rate of interest. While the VA doesn't issue the mortgage loans, it does issue a certificate of eligibility to apply for a VA loan.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close with the first. In most cases the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. Instead of the usual 20 percent down payment, the buyer will just have to pull together the remaining 10 percent.

  • Carry-Back loans

    In the option of a seller "carrying back a second mortgage," the seller loans you part of his or her equity. You would borrow the largest portion of the purchase price from a traditional mortgage lending institution and finance the remainder with the seller. Generally, this form of second mortgage will have higher interest.

The satisfaction will be the same, no matter how you manage to get together your down payment. Your brand new home will be your reward!
Want to discuss your down payment? Call us at (305) 596-7672.

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