Do I have enough for a down payment?
So you want to buy a home, however you don’t think you have enough cash for a down payment? That’s the #1 reason why non owners don’t buy a home. However 8 out of 10 people according to the National Association of Realtors say that owning a home is the “American Dream”.
Most lenders will state you need 20% down. That’s $60,000 on a $300,000 home! Plus you need money for cost of getting your loan. That’s scary! So now what? You can actually buy a home with as little as 3% down or 0 down!
The Federal Housing Administration is a government agency charged with helping home buyers — especially first timers — get approved. The FHA assists mortgage lenders to make loans by guaranteeing a portion of the balance.
And if you’re an active or retired service member, or live in a rural area, you may have access to zero down payment programs through the Department of Veterans Affairs or the Department of Agriculture’s Rural Development program (USDA).
A lower down payment makes you a bigger risk in the eyes of the lender. That’s why it will look for help from one of those government programs to guarantee a portion of the loan. The thing is, you pay for the guarantee. It’s called mortgage insurance. There will be an upfront fee and likely an ongoing charge built into your monthly payment.
Some of the programs don’t require mortgage insurance, but will charge an “upfront guarantee fee” or “funding fee.” Whatever you call it, a fee is a fee. And as a “higher risk,” you’ll likely pay a higher interest rate for the life of the loan in addition to the other fees.
It’s tempting to go with the lowest all-in upfront charges when trying to buy a home. But the key is to do your homework!
~ Check out Homesfund.org. They are a wealth of information.
~ Review your financial situation and meet with several lenders and discuss options.
Buying a home can sometimes be a challenging process, but with a little work and me, at your side, 2017 may be a good time to start looking. I’m here to help. MancosHomes.com