Your Down Payment

Lots of borrowers can qualify for several different kinds of mortgages, but they can't afford a large down payment. Get started here

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 try enrolling in an automatic savings plan to have a percentage of your payroll automatically moved into your savings account. You might look into some big expenses in your spending history that you can give up, or trim, at least temporarily. Here are a couple of examples: you may decide to move into less expensive housing, or stay close to home for your family vacation.

Work a second job and sell things you don't need. Try to get an additional job. This can be exhausting, but the temporary trial can help you get your down payment. In addition, you can put together a comprehensive inventory of items you can sell. Unused gold jewelry can bring a good amount from local jewelry stores. You may have collectibles you can sell on an auction website, or household items for a garage or tag sale. Also, you might want to think about selling any investments you own.

Borrow from your retirement plan. Explore the specifics of your individual plan. You can borrow funds from a 401(k) for a down payment or withdraw from an Individual Retirement Account. You will need to be sure you understand about any penalties, the way this may affect on your taxes, and repayment terms.

Ask for assistance from family members. First-time homebuyers sometimes receive help with their down payment help from thoughtful family members who may be willing to help get them in their first home. Your family members may be happy at the chance to help you reach the milestone of having your own home.

Learn about housing finance agencies. These agencies provide provisional loan programs for moderate and low income buyers, buyers with an interest in sprucing up a home in a particular part of the city, and additional groups as defined by each agency. With the help of a housing finance agency, you can get a below market interest rate, down payment help and other advantages. These kinds of agencies can help you with a reduced interest rate, get you your down payment, and offer other benefits. The central goal of non-profit housing finance agencies is to promote the purchase of homes in certain areas.

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

• Federal Housing Administration (FHA) mortgages

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low and moderate-income individuals qualify for mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers who need to get home financing. FHA provides mortgage insurance to private lenders, enabling new homebuyers who will not qualify for a traditional loan, to receive a mortgage. Down payment requirements for FHA mortgages are below those of conventional mortgages, even though these loans hold average rates of interest. Closing costs can be financed in the mortgage, and the down payment may be as low as 3% of the purchase price.

• VA mortgage loans

  With a guarantee from the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This special loan requires no down payment, has reduced closing costs, and offers a competitive interest rate. Although the mortgages aren't actually provided by the VA, the department certifies borrowers by providing eligibility certificates.

• Piggy-back loans

  You may fund a down payment through a second mortgage that closes at the same time as the first. Most of the time, the piggyback loan takes care of 10 percent of the home's amount, and the first mortgage covers 80 percent. Instead of the traditional 20 percent down payment, the homebuyer just has to cover the remaining 10 percent.

• Carry-Back loans

  In a "carry back" situation, the seller agrees to loan you some of his own equity to help you get your down payment funds. The buyer funds the majority of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Often, this type of second mortgage will have a higher rate of interest.