Down payment funding alternatives
For many buyers, especially first-time buyers, saving up the funds for the down payment can be a seemingly insurmountable hurdle to home ownership. This does not have to be the case. As your mortgage broker, I can help you find creative ways to come up with your down payment.
Using a gift for your down payment
One way to fund a down payment is by using a gift. For many loan programs, a gift may be used for a portion or all of the required down payment. Money given as a gift for a down payment can't come from anyone. Family members are the usual source. And sometimes an employer may also be acceptable. If this is an option open to you, please let me know. I can help you determine which loan programs accept gift funds for down payments and who may give the gift. I'll also supply the gift letter that the person giving the gift is required to sign. The gift letter states that the funds are a gift and will not be paid back.
Zero down mortgage loans
There are two types of no-down-payment loans: VA and USDA
VA Loan Program offers Service persons and veterans that qualify, for a VA Loan that requires no down payment. VA Loans are guaranteed by the U.S. Department of Veterans Affairs. In addition to no down payment, these loans usually offer a competitive fixed interest rate and limited closing costs. While the VA does not issue the loans, it does issue a certificate of eligibility required to apply for a VA loan.
USDA Rural Housing Program offers the following important features:
• 100% financing available
• 6% seller concessions allowed
• No maximum loan limits
• 30-year fixed-rate mortgages
• Must be in non-metropolitan areas
• Single-family/owner-occupied homes
• If appraised value is above the sales price, you can use the difference for concessions, repairs, etc.
There are also private sector alternatives that offer 100% financing of the home purchase price. Let me help you find the down payment and mortgage alternative that's right for you.