Down Payment Problem - Are You Sure? 

There is increasing difficulty for first-time home buyers to save for their down payment as indicated in the graph.  Several factors that contribute to this trend include rising rents, rising home prices, student loan debt and flat wages.

down payment graph.png

Some would-be buyers feel they cannot buy a home today but a large part of those decisions may be based on inaccurate assumptions.

What financing options are available when you lack down payment?

Nine out of ten non-owners believe they need ten percent or more for a down payment. The typical down payment for first-time buyers is six percent. VA has 100% loan programs as well as USDA for certain qualifying areas and buyers. FHA is known for 3.5% down payments. And FNMA and Freddie Mac have down payments as low as 3% and 5%.

There are gift provisions available for buyers who have an “angel” who would like to help them with their down payment.

There are ways to borrow against a person’s qualified retirement program for a down payment. It isn’t necessarily limited to the buyer but could include a relative. Interestingly, a son or daughter can borrow against their retirement to benefit their parents.

In some respects, having good credit and sufficient income is more important than the down payment. Don’t rely on “common knowledge.” Get expert advice and counsel to see if there is a way to advance your dream of owning a home.

Why do experienced realtors ask you to speak to a lender prior to viewing homes?

  1. USDA have specific locations and a realtor's home search will be based on these locations should you go that route
  2. Realtors will need to write your specific lending issues into a contract.  This can only be done at the beginning, as it is a legally binding contract.
  3. If a VA loan or FHA loan involved, there are certain costs that a seller will have to pay for you.  This is necessary information and there are forms that will need to be filled out when an offer is written.
  4. A lender will know all of the programs available to your specific situation.  We work together for a smooth transaction for you.

 

Call me today for guidance in your home buying process. 

Donna Tripp PA

407 416-0445