Your Down Payment

Many buyers qualify for several different kinds of mortgages, but they don't have a lot of money to pay the standard down payment. Do you want to look into getting a new house, but aren't sure how you should get together a down payment?

Tighten your belt and save. Be on the look-out for ways you can trim your monthly expenses to save toward a down payment. You might also decide to enroll in an automatic savings plan at your bank to automatically have a set portion of your take-home pay deposited into a savings account. You could look into some big expenses in your budget that you can give up, or reduce, at least temporarily. For example, you may decide to move into less expensive housing, or stay close to home for your annual vacation.

Sell items you do not need and get a second job. Look for a second job. This can be exhausting, but the temporary trial can help you get your down payment. In addition, you can put together an exhaustive inventory of items you can sell. Broken gold jewelry can be sold at local jewelry stores. Maybe you own collectibles you can sell on an online auction, or household items for a garage or tag sale. You could also research what your investments may bring if sold.

Borrow funds from a retirement plan. Research the details for your individual plan. Some people get down payment money from withdrawing funds from IRAs or borrowing from 401(k) programs. Make sure to ask your plan representative about the tax consequences, your obligation for repaying the money, and any early withdrawal penalties.

Ask for assistance from family members. Many homebuyers are often fortunate enough to get help with their down payment assistance from giving parents and other family members who are willing to help get them in their first home. Your family members may be eager to help you reach the goal of owning your own home.

Research housing finance agencies. Special loan programs are given to homebuyers in certain situations, such as low income purchasers or homebuyers planning to improve homes in a certain part of town, among others. Working with a housing finance agency, you probably will get a below market interest rate, down payment help and other perks. Housing finance agencies may help you with a reduced interest rate, help with your down payment, and offer other assistance. These non-profit agencies were formed to promote community in specific neighborhoods.

Learn about low-down and no-down mortgage loans.

• Federal Housing Administration (FHA) loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a critical role in helping low and moderate-income individuals qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA aids first-time buyers and others who might not be eligible for a conventional mortgage on their own, by offering mortgage insurance to lenders. Interest rates with an FHA mortgage are normally the going interest rate, but the down payment with an FHA loan will be smaller than those of conventional loans. Closing costs can be financed within the mortgage, while your down payment can be as low as 3% of the purchase price.

• VA loans

  VA loans are backed by the U.S. Department of Veterans Affairs. Service persons and veterans can benefit from a VA loan, which usually offers a competitive fixed interest rate, no down payment, and minimal closing costs. Even though the VA doesn't issue the mortgage loans, 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 closes along with the first. Often the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. Rather than the traditional 20 percent down payment, the homebuyer will just have to cover the remaining 10 percent.

• Carry-Back loans

  We a seller carries back a second mortgage, the you borrow part of the seller's home equity.. The buyer finances most of the purchase price with a traditional mortgage program and borrows the remainder from the seller. Usually you will pay a somewhat higher rate with the loan from the seller.

No matter how you gather your down payment, the thrill of owning your own home will be just as great!