The amount you have available for a down payment will affect what types of loans you qualify for. Down payments typically range from 0 to 20 percent of the sales price for the property.
At Water Street Mortgage Corporation we have a variety of loans that require 3% - 5% down!
Tips for Accumulating a Down Payment
Save As part of our initial consultation, we help you look for ways to reduce your monthly expenditures to save toward a down payment. Many times we start working with a client up to one year before they are ready to buy a home; not only consulting on how to save money, but helping to improve credit scores so they can get the lowest rates!
Borrow the down payment from your retirement plan Check the provisions of your retirement plan. You can borrow funds from a 401(k) plan for a down payment or make a withdrawal from an Individual Retirement Account. Be sure you understand the tax consequences, repayment terms and/or possible early withdrawal penalties. See 401(k) for Downpayment.
Move You may be able to save additional funds if you can move into less expensive housing.
Reduce other higher interest rate debt Paying off credit cards, car loans and other high interest loans may also help you to save money over time.
Make a deal with the seller In some circumstances, it is appropriate to ask the seller to pay closing costs or carry a second-mortgage to cover your down payment.
Sell some investments
Get a second job and save your earnings
Gift from Family Parents and other family members are often anxious to help children buy their first home and may have the means to give you a gift of money for a portion or all of your down payment. See Gifts as Down Payments.
Alternative Sources
No-down and Low-down Mortgages
VA Loans VA Loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans can qualify for a VA Loan, which usually offers a competitive fixed interest rate, no down payment and limited closing costs. While the VA does not issue the loans, it does issue a certificate of eligibility required to apply for a VA loan.
Non-Conventional Loans At Water Street Mortgage Corporation, we offer many loans with as little as 3% down payment, closing costs wrapped in the loan, and other financing options.
Piggy-back Loans A second mortgage that closes with the first. Often the first mortgage is for 80% of the purchase price and the "piggyback" is for 10%. The home buyer covers the remaining 10% with their down payment. (Some lenders will write a second mortgage of 15% or even 20% of the purchase price.)
Other Mortgage Products There are new mortgage products introduced every day! We pour through dozens of programs to find the best loan for your situation and, of course, at the best rate!
Documenting Your Down Payment
Documenting that the down payment came from your savings and that you will have savings and/or assets after the down payment gives the lender confidence in your strength as a borrower and your ability to repay the loan.
Take extra care to document the sources for any monies to be used for the down payment or closing costs.
Acceptable Down Payment & Closing Costs Sources
Cash in a bank account.
Mutual funds / stocks / IRA / 401(k).
Proceeds from the sale of another property.
Gift from an immediate relative.
Other sources may be allowed for some loans, please call us at 952-474-6060 for details.
Minnetonka, Minnesota home loans - also serving these cities: Bloomington, Brooklyn Center, Brooklyn Park, Burnsville, Champlin, Chanhassen, Coon Rapids, Corcoran, Crystal, Dayton, Deephaven, Eagan, Eden Prairie, Edina, Excelsior, Golden Valley, Greenfield, Hopkins, Independence, Long Lake, Loretto, Maple Grove, Maple Plain, Medina, Minneapolis, Minnetonka Beach, Minnetrista, Mound, New Hope, Orono, Osseo, Plymouth, Richfield, Robbinsdale, Rogers, St. Boni, St. Louis Park, St. Cloud, St. Paul, Shorewood, Spring Park, Tonka Bay, Wayzata
Minnetonka, MN home loans - research Minnetonka interest rates, mortgage rate trends and more. Our Minnetonka home loans page shows Minnetonka mortgage rates as well as Minnetonka home equity rates to help you purchase a home, refinance, or obtain a home equity loan. You can also easily contact top rated Minnetonka mortgage brokers and lenders. After finding the perfect Minnetonka loan, visit our Minnetonka real estate page to research all of your real estate needs.
