Down Payment

The problem that most renters face is not your ability to make a monthly payment since you are already paying rent once every 30 days. The problem is accumulating enough cash to make a down payment on a home.  But saving for a down payment may not be as difficult as you might think. Consider the following important points:

1. You can buy a home with much less down than you think

There are some local or federal government programs (such as FHA 1st time buyer program) to help people get into the housing market. If you have not recently purchased a home you  may qualify for this program. The typical down payment for an FHA loan is 3.5% and the minimum credit score is 580.  Conventional loan down payments range from 10% to 20%.  If you served in the military (and we thank you for your service to our country) you can buy for zero down.  You can buy a home in certain areas using USDA financing for zero down. There is a program through specific lenders where they will match every dollar of your down payment with three dollars up to $15,000.  If you are lucky enough to have a family member willing to gift you the down payment then you could buy for zero down and zero closing costs if the seller agrees. We will be happy to refer you to a mortgage professional to help you with the details.

2. You may be able to get the seller to help you with your closing costs

If you have enough cash for a down payment the seller may be willing to contribute funds towards your closing costs.  Discuss how to write the offer with your realtor.

3. You can buy a home even if you have problems with your credit rating

The minimum credit rating you must have in order to buyer a home is 580. If you can come up with more than the minimum down payment some lending institutions will still consider you for a mortgage if you FICO is lower than 580.

4. Co-Signer 

If a buyer does not have sufficient credit or income to qualify for a home loan they may still be able to buy with the help of a co-signer. A co-signer is someone who is willing to sign a mortgage loan obligation with you as extra insurance for the lender that you will not default on your monthly payments. The cosigner is required to go through the same application and approval process as the original signer of the loan. 

Co-signers should be very careful before agreeing to co-sign on a loan as they will be responsible to pay the loan if the other party stops making the loan payments. In addition the co-signer’s credit will reflect any late payments. Not all loans allow co-signers. Consult with your mortgage professional for more information.

5. You can, and should, get pre-approved for a home loan before you go looking for a home

Pre-approval is easy, and can give you complete peace-of-mind when shopping for your home. Mortgage experts can obtain written pre-approval for you at no cost and no obligation, and it can all be done quite easily over-the-phone. More than just a verbal approval from your lending institution, a written pre-approval is as good as money in the bank. It entails a completed credit application, and a certificate which guarantees you a mortgage to the specified level when you find the home you’re looking for. Consider dealing only with a professional who specializes in mortgages. Enlisting their services can make the difference between obtaining a mortgage, and being stuck in the renter’s rut forever. There is no cost or obligation.  We have long standing relationships with mortgage professionals

Why on earth would you continue to lose thousands by throwing it away on rent when it only takes a few minutes to meet with us to discuss your specific needs.  This conversation costs you nothing. And, of course, we will not make you feel obligated to buy a home at the end of our FREE consultation. By taking the time to explore your options and learn about the options available so you can buy a home will allow you to be confident and relaxed when you are ready to make this important step.  And don’t forget we will be there to help you every step of the way!   Call for your free consultation today so that you can stop renting and start owning tomorrow.