Your Down Payment

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Lots of folks who are looking to buy a new house can easily qualify for several different kinds of mortgages, but they can't afford a large down payment. Here are a few methods that will help you get together your down payment

Slash your budget and build up savings. Be on the look-out for ways to trim your monthly expenditures to set aside money for a down payment. You may also decide to enroll in an automatic savings plan at your bank to automatically have a specific portion of your take-home pay moved into a savings account. Some effective ways to put together funds include moving into a residence that is less expensive, and staying home for your family vacation for a year or two.

Sell items you don't really need and find a second job. Perhaps you can get a second job to get your down payment money. In addition, you can put together a comprehensive inventory of things you may be able to sell. Unworn gold jewelry can bring a good price from local jewelers. A closet full of small items can add up to a fair amount at a garage or tag sale. You can also explore what your investments may sell for.

Borrow funds from a retirement plan. Research the details for your individual plan. You can pull out money from a 401(k) plan for a down payment or make a withdrawal from an Individual Retirement Account. Be sure to ask your plan representative about the tax consequences, repayment terms, and any early withdrawal penalties.

Ask for a generous gift from family. First-time buyers sometimes receive down payment help from giving family members who may be able to help them get into their own home. Your family members may be willing to help you reach the milestone of buying your first home.

Research housing finance agencies. These agencies offer provisional mortgage loan programs to moderate and low income buyers, buyers interested in remodeling a home in a targeted area, and other specific kinds of buyers as defined by the finance agency. With the help of a housing finance agency, you can receive a below market interest rate, down payment help and other advantages. Housing finance agencies can assist you with a lower rate of interest, help with your down payment, and offer other assistance. These non-profit agencies to boost home ownership in specific neighborhoods.

Explore no-down and low-down mortgage loan programs.

• FHA mortgages

  The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in helping low and moderate-income families get mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers in getting mortgages. FHA assists first-time buyers and others who would not be eligible for a traditional mortgage on their own, by offering mortgage insurance to private lenders. Down payment requirements for FHA loans are lower than those of conventional mortgages, even though these mortgages come with average rates of interest. Closing costs might be included in the mortgage, and your down payment might be as low as 3 percent of the total amount.

• VA mortgage loans

  Guaranteed by the Department of Veterans Affairs, a VA loan is offered to veterans and service people. This specialized loan requires no down payment, has minimal closing costs, and provides a competitive interest rate. Even though the mortgages are not actually provided by the VA, the department verifies applicants by providing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close at the same time as the first. Most of the time, the first mortgage covers 80% of the purchase amount and the "piggyback" is for 10%. The borrower pays the remaining 10%, rather than come up with the usual 20% down payment.

• Carry-Back loans

  In a "carry back" situation, the seller commits to lend you part of his home equity to help you with your down payment money. The buyer finances the highest percentage of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Usually you'll pay a slightly higher interest rate on the loan financed by the seller.

The satisfaction will be the same, no matter how you manage to come up with your down payment. Your brand new home will be your reward!