Your Down Payment

Many borrowers can qualify for a mortgage loan, but they can't afford a large down payment. Want to buy a new home, but aren't sure how you should get together your down payment?

Slash the budget and build up savings. Turn your budget upside-down to find ways you can cut expenses to go toward your down payment. There are bank programs in which some of your paycheck is automatically deposited into savings each pay period. Some practical approaches to build up funds include moving into less expensive housing, and skipping your family vacation for a year or two.

Sell items you don't really need and find a second job. Look for an additional job. This can be exhausting, but the temporary trial can help you get your down payment. Additionally, you can make a comprehensive list of items you can sell. Broken gold jewelry can bring a good price from local jewelry stores. A closet full of small things may add up to a nice sum at a garage or tag sale. Also, you can look into selling any investments you hold.

Tap into retirement funds. Check the provisions of your particular plan. Many homebuyers get down payment money from withdrawing from Individual Retirement Accounts or borrowing from their 401(k) plans. Make sure you are clear about any penalties, the effect this may have on your income taxes, and repayment terms.

Ask for help from generous members of your family. Many buyers are often fortunate enough to receive help with their down payment assistance from giving parents and other family members who may be prepared to help them get into their own home. Your family members may be pleased at the chance to help you reach the goal of owning your own home.

Contact housing finance agencies. Provisional mortgage loans are offered to homebuyers in certain situations, such as low income buyers or future homeowners looking to remodel homes in a certain area, among others. With the help of a housing finance agency, you probably will be given a below market interest rate, down payment assistance and other benefits. These kinds of agencies may help eligible buyers with a reduced rate of interest, get you your down payment, and offer other advantages. These non-profit agencies exist to promote community in particular places.

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

• Federal Housing Administration (FHA) mortgage loans

  The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in aiding low and moderate-income Americans qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers in qualifying for mortgages. FHA helps first-time buyers and others who would not be able to qualify for a typical mortgage loan on their own, by providing mortgage insurance to private lenders. Down payment totals for FHA mortgages are less than those of conventional mortgage loans, even though these loans have average interest rates. The down payment can be as low as 3 percent and the closing costs can be financed in the mortgage.

• VA mortgages

  With a guarantee from 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 VA doesn't actually provide the mortgages, it does certify eligibility to apply for a VA mortgage.

• Piggy-back loans

  You can fund your down payment using a second mortgage that closes along with the first. Usually the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. Rather than the usual 20 percent down payment, the homebuyer just has 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.. You would borrow the largest portion of the purchase price from a traditional mortgage lender and finance the remaining amount with the seller. Typically you will pay a somewhat higher rate on the loan financed by the seller.

No matter how you gather down payment funds, the thrill of living in your own home will be just as sweet!