Today I’d like to talk with you about first time buyers, and the biggest hurdle they face when buying a home. And that hurdle is –

How can I save up the down payment?

Well, one simple answer is – do you really need 2 kidneys? If your answer is yes, let’s look a little deeper.

First, you might not need as much as you think. Let’s look at a few options. And there are some programs available to qualified buyers where little or no cash is required. However, on all of these you’ll need to pay mortgage insurance in one form or another. And with all of the programs we’ll discuss it’s possible to have the seller pay some or all of the closing costs.

FHA mortgage

The biggest and most popular is an FHA mortgage. With an FHA mortgage you don’t need 20 % down, just 3.5%. On a $300,000 mortgage that’s only $10,500. And if you’re credit score isn’t ideal, FHA requires lower scores.

VA loan

Next is the VA loan. If you’re a veteran you may qualify for a VA backed mortgage. With this, you can buy a home with nothing down, just closing costs which, as I said, we may be able to get the seller to pay.

US Dept of Agriculture loan

How about a US Dept of Agriculture loan? This is another program where you can buy with nothing down. Not all areas are eligible, but some local areas are. And no – you don’t have to buy a farm.

FHA 203K loan

Are you handy around he house? If yes, an FHA 203K loan may be right for you. This is great if you want to buy a handyman special. You see, you can get a loan for the value of the house after it’s renovated. First they release the purchase money, then they release the funds necessary to make the repairs. And, this is also possible with 3.5% down. What a great way to build Sweat Equity!

First time buyer grants.

Some counties have grant money available. Sometimes you’ll need to live in the home for a certain length of time, If you move earlier, you need to make arepayment. But the end of that period the repayment is forgiven. The issue is that often there’s maximum income restrictions. And if you’re under the income limit, you may not qualify for the mortgage.

Other grants are sometimes available for some government employees, police and teachers for example. Lots of restrictions, but worth checking out.

As a last resort

You can always ask for help from the First National Bank of Dad

Got questions? Or when you’re ready to look at homes, give me a call at 732-598-7700