Your Down Payment

Lots of buyers qualify for several different kinds of mortgages, but they can't afford a large down payment. Do you want to buy a new home, but don't know how you should put together your down payment?

Slash the budget and build up savings. Look for ways to reduce your monthly expenses to set aside money for a down payment. There are bank programs in which a specific portion of your paycheck is automatically deposited into savings each pay period. You could look into some big expenses in your budget that you can give up, or reduce, at least temporarily. Here are a couple of examples: you might move into less expensive housing, or skip a vacation.

Work more and sell things you do not need. Look for a second job. This can be rough, but the temporary difficulty can help you get your down payment. You can also get creative about the items you can put up for sale. A closet full of small things can add up to a nice sum at a garage or tag sale. You can also look into what any investments you own could sell for.

Tap into your retirement funds. Research the details of your individual plan. Some people get down payment money from withdrawing from their IRAs or borrowing from 401(k) programs. You will want to make sure you know about any penalties, the way this will affect on your income taxes, and repayment terms.

Request a gift from family. Many buyers are sometimes lucky enough to get help with their down payment assistance from thoughtful family members who are able to help get them in their first home. Your family members may be happy at the chance to help you reach the goal of having your first home.

Contact housing finance agencies. These types of agencies offer provisional loan programs to low and moderate-income homebuyers, buyers with an interest in remodeling a home within a particular area, and other groups as specified by each agency. With the help of a housing finance agency, you can get an interest rate that is below market, down payment help and other advantages. Housing finance agencies can assist you with a reduced interest rate, get you your down payment, and provide other advantages. The principal purpose of non-profit housing finance agencies is build up the purchase of homes in certain places.

Explore no-down and low-down mortgage loans.

• 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 helping low to moderate-income individuals qualify for mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers in getting mortgages. FHA provides mortgage insurance to the private lenders, enabling homebuyers who will not qualify for a traditional mortgage loan, to get home financing. Down payment requirements for FHA loans are lower than those for typical mortgage loans, although these loans come with average rates of interest. The down payment can go as low as 3 percent while the closing costs could be packaged in the mortgage loan.

• VA mortgages

  With a guarantee from the Department of Veterans Affairs, a VA loan is offered to veterans and service people. This special loan requires no down payment, has minimal closing costs, and provides a competitive rate of interest. While the loans don't originate from the VA, the office certifies applicants by providing eligibility certificates.

• Piggy-back loans

  You can finance your down payment through a second mortgage that closes with the first. Usually the piggyback loan is for 10 percent of the purchase price, and the first mortgage covers 80 percent. The borrower covers the remaining 10%, rather than putting the typical 20% down payment.

• 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 lending institution and finance the remainder with the seller. Typically you'll pay a somewhat higher interest rate on the loan financed by the seller.