Your Down Payment

Lots of buyers qualify for a loan, but they don't have much to pay a down payment. Here are a few straightforward methods that will help you get together your down payment

Reduce expenses and save. Scrutinize your budget to uncover ways you can cut expenses to go toward your down payment. You might also decide to enroll in an automatic savings plan at your bank to have a portion of your payroll automatically moved into a savings account. You would be wise to look into some big expenses in your budget that you can give up, or reduce, at least temporarily. Here are a couple of examples: you might move into less expensive housing, or skip a family vacation.

Sell things you don't need and find a second job. Maybe you can get an additional job to get your down payment money. You can also get creative about the items you could be able to put up for sale. Multiple small things may add up to a nice sum at a garage or tag sale. You can also research what your investments will sell for.

Tap into retirement funds. Explore the specifics for your particular plan. Many homebuyers get down payment money from withdrawing funds from IRAs or borrowing from their 401(k) plans. Be sure you are clear about any penalties, the effect this may have on your taxes, and repayment obligation.

Ask for a generous gift from your family. First-time homebuyers sometimes get help with their down payment help from caring family members who may be eager to help them get into their first home. Your family members may be eager to help you reach the goal of buying your first home.

Research housing finance agencies. These agencies provide special mortgage loan programs to moderate and low income buyers, buyers with an interest in sprucing up a residence in a particular part of the city, and other groups as defined by the agency. With the help of a housing finance agency, you may get an interest rate that is below market, down payment help and other advantages. Housing finance agencies may help you with a lower rate of interest, get you your down payment, and provide other advantages. The main mission of non-profit housing finance agencies is boosting home ownership in specific places.

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

• 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 significant part in aiding low and moderate-income buyers get 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 private lenders, enabling homebuyers who might not qualify for a traditional mortgage, to receive a mortgage. Down payment requirements for FHA loans are smaller than those of traditional mortgage loans, even though these mortgages have current interest rates. Closing costs may be covered by the mortgage, and your down payment could be as low as 3 percent of the total.

• VA mortgages

  VA loans are backed by the Department of Veterans Affairs. Veterens and service people are eligible for a VA loan, which usually offers a low fixed interest rate, no down payment, and reduced closing costs. Although the VA doesn't actually provide the mortgages, 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 closes along with the first. Often the first mortgage is for 80% of the cost of the home and the "piggyback" funds 10%. Rather than the traditional 20 percent down payment, the buyer just has to pull together the remaining 10 percent.

• Carry-Back loans

  We a seller carries back a second mortgage, the seller loans you part of his or her home equity. The buyer finances most of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Usually you will pay a slightly higher interest rate on the loan from the seller.