First-Time Home Buyers Down Payment Strategies

Posted by brainjmedia03 on Thursday, November 22, 2018

Stone Bridge Mortgage Group_More Easy Tips To Help You Save For Your Home Loan

When you’re ready to buy a new home, saving up enough for the down payment can seem like an impossible hurdle. There are ways to help you save up enough to be on your way to buying your first home, though!

Remember, it doesn’t always take 20% down. If you qualify for an FHA loan or can get your mortgage approved by the Department of Veterans Affairs or the Department of Agriculture, your down payment can be much lower! Sometimes mortgages backed by the VA or USDA don’t require a down payment at all. FHA-backed loans can require as little as 3.5% down.

Still, the down payment can be a hefty chuck of change. How can you save up more?



Although nothing is guaranteed with crowdfunding, you may find a few generous folks willing to help you along to your goal. You’ll want to use the right crowdfunding site, of course. Kickstarter doesn’t allow for personal fundraising. GoFundMe is worth trying, but it is usually best suited for hard-luck appeals like medical experiences for life-threatening diseases. could be an option. On this site you can build an online profile and contributions can be funneled directly into a linked bank account. The website does seem to be most often used for engaged couples and newlyweds, and there is a considerable transaction fee – about 8% per donation.

Help from Family

Asking help from loved ones can help you save towards a down payment as well. However, it should be noted that if you plan to use money gifted to you towards a down payment, mortgage lenders often require extensive documentation. The donors will have to verify in writing not only that they made the gift but that they have the financial ability to make such a donation. They will need to provide bank statements as well as a letter that confirms that the donation is, in fact, a gift and not a loan. If you are expected to pay this money back to the donor, then that will affect your debt-to-income ratio in the eyes of your lender, which could affect your eligibility for a loan.

State and Local Down Payment Assistance

Although many don’t realize, there are thousands of assistance initiatives across the nation. Every state has programs implemented by government agencies, nonprofits, foundations, and even some employers. Programs often change, depending on if funding is available. Assistance requirements typically set a maximum sale price for a county or other geographic definition, as well as a maximum household income limit which can vary by location and number of members in the household. These programs can help with both the down payment and the monthly mortgage payments.

Tapping Retirement Accounts

Tapping into retirement savings can be tempting, but you should know that there are risks and penalties involved. If you have an employer-sponsored 401(k) plan, these often allow for penalty-free hardship withdrawals or loans. However, if you are under 59.5 years of age, you will have to pay income taxes and a 10% penalty on the withdrawal. And loans can trigger an immediate repayment — or taxes and a penalty — if you lose your job.

Save, Save, Save

The most obvious answer is to save whatever you can. If you earn tips at your job or get some gift money on your birthday or other holidays, put it back.

It’s likely that you’ll need to combine as many money-saving strategies as possible to get your down payment. With careful planning, though, nothing is impossible.

Still looking for help with buying your first home?

Stonebridge Mortgage Group can help guide you through the home buying process. We help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. We serve the greater Portland area and are in Gresham, Oregon.


Call us today at 503.661.5580


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