Mar

17

Downpayment Assistance For New Buyers

Filed Under First-Time Buyers | Leave a Comment

When you finally find the home of your dreams you certainly don’t want to loose it to another offer because you don’t have your financing lined up.

Buyers going in for the first time often don’t recognize the distinction between being pre-qualified and pre-approved. Mortgage lenders are notorious for saying anything to keep you from looking elsewhere for a mortgage. In that case bring pre-qualified is worth little more than the paper upon which it is written. All the broker has collected is preliminary information – certainly not enough for an underwriter to review.

Being pre-approved is what is necessary to actually succeed at getting an offer accepted. A pre-approval should be a written commitment to finance up to a certain point. When you accompany an offer with such a document the seller can take your offer seriously, and frankly, should only consider a contingency with a pre-approval letter. Nevertheless many in this climate will receive for consideration just about any offer.

I have found that non-contingent offers based on a cash offer are always the ones that get the best price point. Seller financing and private money loans can allow this to happen if the selling price is low enough. I this market, with so many foreclosures this is not uncommon.

A distressed property can be available for 65 cents on the dollar and with private money an investor can acquire properties with built-in equity (after a little fix-up).

For many buyers it’s the down payment that is the problem so here are some ideas you might consider to get the greenbacks required.

VA LOANS

Veterans who qualify can also obtain VA loans that require no down payment. Veterans and active duty military servicemen and servicewomen can get these loans if they can qualify. These types of loans are available to qualifying veterans and active duty military servicemen and servicewomen. VA loans feature:

  • Fixed, below market interest rates
  • Low fixed payments
  • No down payments

VA VENDEE LOANS

Sometimes a buyer can obtain a down payment free VA loan without being a veteran. This can happen on a foreclosed home that has a VA loan on it. This could be a great option even for investors. . The benefits of VA Vendee loans include:

  • Low closing costs
  • No down payments

FHA PLUS LOANS

FHA plus loans require financing of the down payment in the form of another loan granted alongside the mortgage loan. FHA plus loans are ideal for buyers who are experiencing some financial hardship but have demonstrated the ability to make a mortgage payment. The good points about FHA plus loans are:

  • Assisted down payments
  • Easy qualification requirements
  • Closing costs are financed

All of these programs only work for first time home buyers. They were created to give buyers who might otherwise be unable to qualify for other traditional loan programs an opportunity to buy a home. Home ownership is important to the economy so our government has made it much easier for people to achieve the dream of home ownership by creating these down payment assistance programs.

You should also know that the government has tried to stimulate first time home buyers to purchase by providing a one-time tax break of $7,500. This is only available this year so get busy.

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