Your Down Payment

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Lots of borrowers can easily qualify for several different kinds of mortgages, but they can't afford a large down payment. Here's where you start

Slash the budget and build up savings. Be on the look-out for ways to trim your expenditures to put away money for a down payment. You may also decide to enroll in an automatic savings plan to have a percentage of your pay automatically deposited into savings. Some effective approaches to build up funds include moving into housing that is less expensive, and skipping your vacation for a year or two.

Work more and sell things you do not need. Perhaps you can get a second job to get your down payment money. Additionally, you can make an exhaustive list of things you may be able to sell. Unused gold jewelry can be sold at local jewelers. Multiple small things can add up to a fair amount at a garage or tag sale. Also, you can consider selling any investments you hold.

Borrow your down payment from a retirement plan. Research the specifics of your particular plan. Many people get down payment money by withdrawing what they need from their IRAs or getting money out of 401(k) programs. Be sure you know about any penalties, the effect this could have on income taxes, and repayment terms.

Ask for assistance from family members. Many buyers are sometimes lucky enough to receive help with their down payment help from giving parents and other family members who are anxious to help them get into their first home. Your family members may be pleased to help you reach the milestone of owning your own home.

Contact housing finance agencies. Special mortgage programs are extended to buyers in certain circumstances, like low income purchasers or people planning to renovating homes in a targeted part of town, among others. With the help of this kind of agency, you probably will receive a below market interest rate, down payment help and other incentives. Housing finance agencies can help you with a lower rate of interest, get you your down payment, and offer other benefits. These non-profit programs exist to build up the value of homes in certain areas.

Find out about low-down and no-down mortgages.

• Federal Housing Administration (FHA) loans

  The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in aiding low to moderate-income families qualify for mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA aids first-time buyers and others who might not be able to qualify for a traditional loan on their own, by offering mortgage insurance to the lenders. Down payment sums for FHA loans are smaller than those of traditional mortgage loans, even though these mortgages come with current rates of interest. The required down payment can be as low as three percent while the closing costs could be included in the mortgage.

• VA mortgages

  Guaranteed by the Department of Veterans Affairs, a VA loan assists veterans and service people. This specialized loan does not require a down payment, has limited closing costs, and offers a competitive rate of interest. While the VA does not actually issue the mortgages, it does issue a certificate of eligibility to apply for a VA mortgage.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close along with the first. Usually the piggyback loan takes care of 10 percent of the purchase amount, while the first mortgage covers 80 percent. Instead of the usual 20 percent down payment, the homebuyer just has to cover the remaining 10 percent.

• Carry-Back loans

  With a carry-back mortgage, the seller loans you part of his or her home equity. You would borrow the majority of the purchase price from a traditional lender and borrow the remaining amount from the seller. Usually you'll pay a somewhat higher interest rate with the loan financed by the seller.

No matter your method of getting together your down payment money, the thrill of owning your own home will be just as sweet!