How to Gather Money for a Down Payment

As you look to take out your first Florida home loan, you want to buy the best home you can afford. However, gathering the usual 15 to 20 percent of your purchase for a down payment can be challenging.

Here are a few tips from Lendingtree.com for pulling together the cash:

• Bank your extra money. Any time you get a tax refund, bonus, commission or birthday check, put it into a separate savings account that you never touch.

• Live on one income. If you are in a couple, try living on one partner’s income while saving the other’s.

• Pay off your debt. Get rid of debts with high interest rates, such as outstanding credit-card balances. This will ease the strain on your wallet and improve your credit rating. When your debts are paid off, try to save the money that would have gone to payments every month.

• Take a second/piggyback mortgage. If you can’t get five percent or more together for your down payment, you may be able to get a piggyback loan to cover what your first mortgage doesn’t.

• Ask your lender about Fannie Mae or Freddie Mac products. Both of these Congress-chartered companies have flexible, low down-payment products that allow you to buy a home with down payments of zero to three percent.

• Find out about loan assistance programs. Government organizations like Veteran Affairs and the Federal Housing Administration offer programs that help people who don’t have large down payments obtain mortgage financing. Also, check with your state and local housing authorities to find out what they can offer.

Take all of this advice into consideration. A Florida home loan is a significant investment, but it’s one you can afford if you follow the right steps.