Your Down Payment

Many borrowers can easily qualify for various loan programs, but they don't have a large sum of cash to pay a down payment. Below are a few straightforward methods that will help you get together a down payment

Slash the budget and build up savings. Turn your budget upside-down to uncover extra money to go toward your down payment. You might also try enrolling in an automatic savings plan to automatically have a predetermined amount from your take-home pay transferred into your savings account. Some effective methods to build up funds include moving into housing that is less expensive, and skipping your family vacation for a year or two.

Work a second job and sell items you do not need. Look for an additional job. This can be rough, but the temporary difficulty can help you get your down payment. You can also seriously consider the possessions you really need and the items you might be able to sell. Multiple small items can add up to a nice sum at a garage or tag sale. You can also research what your investments may sell for.

Borrow money from your retirement plan. Research the details of your particular plan. Many homebuyers get down payment money from withdrawing what they need from IRAs or getting funds out of their 401(k) programs. Make sure you are clear about any penalties, the effect this may have on your income taxes, and repayment obligation.

Ask for assistance from family members. First-time buyers sometimes receive down payment help from caring family members who may be eager to help get them in their first home. Your family members may be willing to help you reach the goal of owning your first home.

Learn about housing finance agencies. These agencies provide special mortgage programs for moderate and low income buyers, buyers interested in sprucing up a residence in a specific part of the city, and additional specific types of buyers as defined by the agency. Working through a housing finance agency, you may be given a below market interest rate, down payment help and other perks. Housing finance agencies can help you with a lower rate of interest, help with your down payment, and provide other assistance. These non-profit agencies exist to boost the value of homes in particular areas.

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

• Federal Housing Administration (FHA) mortgage loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in helping low to moderate-income buyers qualify for mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals in getting home financing. FHA offers mortgage insurance to private lenders, making the buyers eligible for a loan. Down payment amounts for FHA loans are less than those with conventional mortgage loans, although these mortgages have average rates of interest. Closing costs can be financed in the mortgage, while the down payment could be as low as 3 percent of the total.

• VA loans

  Guaranteed by the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This special loan requires no down payment, has minimal closing costs, and provides the benefit of a competitive rate of interest. While the mortgages aren't actually issued by the VA, the department verifies borrowers by issuing eligibility certificates.

• Piggy-back loans

  You may fund a down payment using a second mortgage that closes along with the first. Often the first mortgage covers 80% of the cost of the home and the "piggyback" is for 10%. The homebuyer covers the remaining 10%, instead of needing to put together the typical 20% down payment.

• Carry-Back loans

  In the option of the seller "carrying 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 remainder from the seller. Typically, this form of second mortgage has a higher rate of interest.

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