Based on information from the National Association of Realtors “2016 Profile of Home Buyers and Sellers,” the hardest part of purchasing a new home is coming up with the funds that are needed for its down payment.
In many cases, the purchaser of a home that is being financed will need at least 5 to 10 percent in the form of down payment – and, if you want to avoid having to pay extra every month for PMI (private mortgage insurance), your necessary down payment amount will jump to 20%.
The good news is, though, that there are some creative ways that you can come up with the funds that you need – and they all don’t have to come directly out of your own pocket.
While you might not have been left an inheritance from a long lost rich uncle, you may be able to get help from Uncle Sam. For example, the U.S. Department of Housing and Urban Development – also known as HUD – provides several potential options for new home owners.
For instance, if you meet certain income or location requirements, you may be able to get help with not just your home’s down payment, but for closing costs as well. Likewise, if you are a Veteran or you work in certain professions, you could also find the assistance that you need.
In some cases, you may be able to obtain assistance from the sellers themselves. By making use of “seller concessions” – a motivated seller may be willing to assist a buyer with the closing costs on the deal. In doing so, this can leave you with more money to put towards the purchase of the home.
There may even be some help available via your lender. Many mortgage lenders will offer programs to help potential buyers get into the homes that they want. As an example, there are many loan programs that will only require 3% down in order to qualify – and, in some cases, you may even be able to go this route without having to pay into the PMI program.
Taking the Next Step
If you plan to purchase a home in the near future, we can help you to find the one that fits your needs, as well as your budget. Contact Us for more details on how you can make your dream of owning a home a reality.