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Mortgages

Help & Tools

Learn more about:
Mortgages & Home Buying

Download Quick Guide:
Mortgage Loans

First Time Home Buyers Tactics

Saving for a Down Payment

Saving enough money for the down payment and closing costs may be one of the hardest parts of preparing to buy a home, especially if you're a first-time home buyer. It could take some time so here are some helpful ideas.

Save - Look for ways to reduce your monthly expenses to save toward a down payment. Consider enrolling in an automatic savings plan and having a portion of your pay automatically transferred into that savings plan.
Temporarily discontinue your 401(k)
Bank your tax refund
Reduce other higher interest rate debt - Paying off credit cards will initially reduce your savings, but the money you will save from higher interest rates will pay off in the long run.
Move into less expensive housing.
Skip a year's vacation.
Get a second job and save your earnings.
Gift from family - Some loan programs allow borrowers to use gift money to make down payments. Generally, the gifts have to come from immediate family members who may have the means to give you a gift of money.

Down payment considerations

In helping you decide how much money you want to put toward your down payment, you should consider your moving expenses, home repair and decorating costs, and any needed "big ticket" items (such as replacing a car). You don't want to move into your new home with all your savings depleted.

Documenting your down payment

Take extra care to document the sources for any money that is used for the down payment or closing costs, particularly funds you receive as a gift.

Documenting that the down payment comes from your savings and that you will have savings and/or assets over and above the down payment gives the lender confidence in your strength as a borrower and your ability to repay the loan.

Your Mortgage Payment

A mortgage payment consists of principal and interest (P&I), taxes and insurance. The P&I payment is based upon the rate, balance and term while we collect a little more than 1/12th of your total tax and insurance amounts on a monthly basis to pay your real estate tax and homeowners bills as they come due. We may also collect for flood insurance and private mortgage insurance (PMI) if it applies to your loan.