Your Down Payment

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Lots of folks who are looking to purchase a new home can easily 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 to put together a down payment?

Tighten your belt and save. Look for ways to trim your expenditures to set aside funds for a down payment. Also, you can look into bank programs in which some of your take-home pay is automatically placed into a savings account every pay period. You could look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. For example, you might move into less expensive housing, or skip a vacation.

Work a second job and sell items you don't need. Try to get an additional job. This can be rough, but the temporary trial can help you get your down payment. You can also get creative about the things you can put up for sale. You might have desirable items you can sell at an online auction, or quality household goods for a garage or tag sale. Also, you might want to think about selling any investments you hold.  The lender may require documentation proving the sale of personal items.  Your mortgage professional can guide you on what you may need.

Borrow your down payment from your retirement plan. Investigate the parameters of your particular program. You can borrow funds from a 401(k) for you down payment or perform a withdrawal from an Individual Retirement Account. Be sure you are knowledgeable about any penalties, the way this may affect on your income taxes, and repayment terms.

Ask for help from generous family members. Many buyers sometimes get help with their down payment assistance from caring family members who may be able to help get them in their own home. Your family members may be inclined to help you reach the goal of buying your own home.

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

  • Federal Housing Administration (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 assisting low and moderate-income buyers qualify for mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers who need to qualify for mortgage loans. FHA offers mortgage insurance to private lenders, enabling buyers who will not qualify for a traditional mortgage loan, to obtain financing. Interest rates with an FHA mortgage typically feature the current interest rate, but the down payment with an FHA mortgage will be smaller than those of conventional loans. The required down payment may be as low as 3 percent and the closing costs may be covered by the mortgage.

  • VA mortgages

    Guaranteed by the Department of Veterans Affairs, a VA loan assists service people and veterans. This specialized loan does not require a down payment, has reduced closing costs, and provides the benefit of a competitive interest rate. Even though the VA doesn't actually provide the mortgage loans, it does certify eligibility to qualify for a VA loan.

  • Piggy-back loans

    You can fund your down payment through a second mortgage that closes at the same time as the first. Most of the time, the first mortgage is for 80% of the cost of the home and the "piggyback" is for 9.99%. The homebuyer pays the remaining 10.01%, instead of putting the typical 20% down payment.

The feeling of accomplishment will be the same, no matter how you manage to come up with your down payment. Your brand new home will be well worth it!
Need to talk about the best options for down payments? Give us a call: (407) 294-4707.

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