Your Down Payment

Lots of buyers can easily qualify for various loan programs, but they can't afford a large down payment. Want to buy a new home, but aren't sure how to get together your down payment?

Slash the budget and build up savings. Turn your budget inside out to discover extra money to go toward your down payment. Also, you can look into bank programs through which a portion of your take-home pay is automatically deposited into savings each pay period. Some practical methods to build up funds include moving into a residence that is less expensive, and skipping a year's vacation.

Work more and sell items you do not need. Try to find an additional job. This can be exhausting, but the temporary difficulty can provide your down payment money. You can also seriously consider the possessions you really need and the items you might be able to sell. Multiple small items might add up to a fair amount at a garage or tag sale. Also, you might want to think about selling any investments you own.

Tap into your retirement funds. Explore the details for your particular plan. Many people get down payment money by withdrawing what they need from their Individual Retirement Accounts or borrowing from 401(k) plans. Be sure you comprehend the tax consequences, your obligation for repaying the money, and possible penalties for withdrawing early.

Ask for help from family members. Many buyers are sometimes lucky enough to receive help with their down payment assistance from giving parents and other family members who are prepared to help get them in their first home. Your family members may be pleased to help you reach the goal of having your first home.

Learn about housing finance agencies. Special mortgage loans are extended to buyers in specific circumstances, such as low income homebuyers or homebuyers looking to remodel homes in a targeted part of town, among others. Working with a housing finance agency, you probably will get a below market interest rate, down payment assistance and other incentives. These types of agencies may help eligible homebuyers with a lower rate of interest, get you your down payment, and offer other advantages. These non-profit agencies exist to promote community in specific places.

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

• 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 vital part in assisting low to moderate-income families qualify for mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to the private lenders, ensuring the buyers are eligible for financing. Interest rates with an FHA loan are generally the market interest rate, but the down payment for an FHA mortgage are lower than those of conventional loans. The down payment can be as low as three percent and the closing costs might be covered by the mortgage.

• VA mortgages

  VA loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans can get a VA loan, which generally offers a low fixed interest rate, no down payment, and limited closing costs. Although the VA does not provide the mortgage loans, it does certify eligibility to apply for a VA loan.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close with the first. Usually the piggyback loan takes care of 10 percent of the home's amount, while the first mortgage finances 80 percent. The homebuyer covers the remaining 10%, instead of come up with the usual 20% down payment.

• Carry-Back loans

  With a carry-back mortgage, the you borrow a portion of the seller's home equity.. The buyer finances most of the purchase price through a traditional mortgage program and borrows the remainder from the seller. Often, this type of second mortgage has a higher rate of interest.