Your Down Payment

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Many people who are looking to purchase a new home qualify for various loan programs, but they can't afford a large down payment. Want to look into getting a new house, but don't know how you should get together your down payment?

Slash your budget and build up savings. Turn your budget upside-down to discover extra money to save for your down payment. You could also try enrolling in an automatic savings plan at your bank to have a percentage of your pay automatically deposited into a savings account. Some effective strategies to build up funds include moving into less expensive housing, and skipping your family vacation for a year or two.

Sell items you do not really need and get a second job. Perhaps you can get a second job to get your down payment money. You can also get serious about the possessions you really need and the things you might be able to put up for sale. You might have desirable items you can sell at an auction website, or quality household items for a garage or tag sale. Also, you can consider selling any investments you hold.

Borrow from your retirement plan. Explore the specifics of your individual plan. You may borrow funds from a 401(k) for you down payment or withdraw from an IRA. Make sure you understand about any penalties, the effect this may have on taxes, and repayment terms.

Ask for assistance from generous family members. Many buyers sometimes receive help with their down payment help from thoughtful family members who may be able to help them get into their first home. Your family members may be inclined to help you reach the milestone of owning your own home.

Contact housing finance agencies. These agencies extend special loan programs to low and moderate-income borrowers, buyers interested in renovating a residence within a particular area, and additional certain types of buyers as specified by the finance agency. Financing with a housing finance agency, you may receive an interest rate that is below market, down payment assistance and other incentives. These kinds of agencies may assist you with a lower rate of interest, get you your down payment, and provide other benefits. These non-profit agencies to promote the value of homes in particular places.

Find out about low-down and no-down mortgage loan programs.

  • Federal Housing Administration (FHA) loans

    The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low to moderate-income buyers get mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to the private lenders, helping the buyers to become eligible for a mortgage. Down payment totals for FHA loans are lower than those of conventional mortgages, even though these mortgages come with average interest rates. The down payment may be as low as three percent and the closing costs might be packaged in the mortgage.

  • VA loans

    VA loans are backed by the U.S. Department of Veterans Affairs. Service persons and veterans can receive a VA loan, which generally offers a reasonable rate of interest, no down payment, and minimal closing costs. Although the mortgages don't originate from the VA, the department verifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes at the same time as the first. Usually the piggyback loan takes care of 10 percent of the home's amount, and the first mortgage covers 80 percent. 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 a portion of the seller's home equity.. In this scenario, you would borrow the majority of the purchase price from a traditional lending institution and borrow the remainder from the seller. Typically you will pay a somewhat higher rate on the loan financed by the seller.

The satisfaction will be the same, no matter which approach you use to come up with your down payment. Your new home will be your reward!

Want to discuss the best options for down payments? Give us a call at (303) 993-6358.

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