Owning a home can be a walk in the park or an unreachable dream for different people. When it comes to raising a down payment on your dream home, the rule of thumb is always to put down a minimum of 20%. If that is hard to afford, depending on the house’s total value, don’t despair.
A down payment assistant program may be your gateway to the keys of the desired house. Usually, they also have guidelines regarding who qualifies for the loans/grants. However, if raising the required cash to buy a home is an obstacle, they are worth a shot of looking into it.
So why should you take that route?
Purchase Your Home Sooner
Your dream of owning a home is not dead after all. These down payment assistance programs have come to rescue most people that do not qualify to raise the down payment rate required for mortgage approval.
They offer an agreed amount of money regarding your terms of qualification and the house’s total value, mostly to first-time homebuyers. With this amount, homebuyers can gladly use it to settle the down payment or closing costs; for instance, my-downpaymentassistance.com.
One thing that discourages people from applying for loans from banks and most funding systems is the high-interest rates of repayment. Luckily, these down payment assistance programs are flexible and effortless when repaying. Besides, they work mostly with your terms if you qualify.
Usually, you receive one of three types of money; interest-free loan, grant, and debt to repay in the future. The amount of assistance is around 4%, 5%, or even 6% of your first mortgage value, reliant on the type of loan you select.
Nullifies FHA Premiums and Mortgage Insurance
FHA (Federal Housing Administration) loans ask for a small down payment and have fairly relaxed rules for borrowers to meet the requirements. However, FHA loans aren’t the best option for any borrower. This is because they usually ask for mortgage insurance, which totals to an additional cost on your loan.
Lenders ask for payment of mortgage insurance if the borrower cannot raise the down payment. This is because it acts as a protection against losses if a borrower fails to pay as agreed. So, with a down payment assistance program qualifying you for a down payment required, you will not have to either ask for the FHA or mortgage insurances.
House in Proximity to Jobs
The good thing about these down payment assistance programs is that they are spread in many regions. It’s usually both annoying and tiring to commute a long distance daily to your place of work.
It would be better to check if your area of work has these programs to join and meet their requirements. This way, you can easily get your house near your place of work. Better still, save a lot from commuting always.
Home Ownership Education
As a first-time house buyer and you have no clue where to start, the best place would be in a down payment assistance program. Apart from becoming a member and making it easy for you to put down a down payment for a mortgage, they will also educate you on all the terms and house ownership.
Therein, you will learn about the different types of mortgages, which will help you choose a favorable option regarding your financial strength. While learning, you also get advice on various options since they are just a block away from you.
Finally, it would help if you got several choices of down payment assistance programs. That way, you will have the luxury to choose the one with flexible and friendly terms.