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Easing Your Way Into Homeownership: A Guide To Low Down Payment Mortgage Programs
There's no question about it: Buying a first home is a big financial commitment. In most cases, a home is the largest single purchase an individual or family will make in a lifetime. However, because of the tax advantages afforded to homeowners, buying a home also can be one of the best financial decisions you'll ever make. Problem is, many would-be homeowners remain renters simply because they mistakenly believe mortgage lenders require that buyers come up with 20 percent of the purchase price as a down payment. While it's true lenders feel it's less risky to work with buyers who are able to bring a substantial down payment to the table, the standard 20 percent requirement is fast becoming a relic of the past. In recent years, lenders have become more flexible in working with first-time homebuyers by creating a variety of special programs that require only a small down payment. These programs, combined with the most favorable interest rates in two decades, have encouraged growing numbers of renters to consider the tremendous benefits of home ownership. While the list of programs offered by individual lenders is too extensive to mention in detail, here are some common programs you are likely to come across as you work with your real estate agent to purchase your first home: Federal Housing Administration (FHA): FHS mortgages allow homebuyers to purchase a home with as little as a 5 percent down payment, and to finance all non-recurring closing costs. The current maximum loan amount in most urban markets is $151,725. In addition, borrowers are allowed to use up to 41 percent of their gross income toward paying mortgage debt - well above the ratio allowed under most private programs. Department of Veterans Affairs (VA): VA mortgages allow veteran or active service personnel purchase home with no down payment, up to the current maximum price of $184.000. However, there is no purchase price limitation for buyers able to make a down payment. Like the FHA program, VA borrowers can put up to 41 percent of gross income toward their mortgage debt. Mortgage Revenue Bonds and Mortgage Credit Certificates: Mortgages funded with these instruments typically require a minimum of 5 percent down and have interest rates that are 1.5 to 2 percentage points below conventional 30-year fixed rates. These types of loans, offered by state and local housing agencies, are available only to first-time homebuyers. There generally are income and purchase price caps that vary, depending on where you plan to buy. Private Mortgage Insurance: Most major lenders offer privately insured mortgages, which generally require a 10 percent down payment (although some lenders offer loans with a 5 percent down payment to buyers with exceptional credit). These loans typically are not limited by maximum loan amount or purchase price limitation. Community Homebuyer Program: Through their networks of mortgage lenders, the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) offer Community Homebuyer Program loans. These programs require a 5 percent down payment, 3 percent of which may be a gift. To further help buyers qualify, applicants may use 38 percent of their gross income. Currently, the maximum loan amount available through these programs is $203,150. Clearly, there are a lot of options for first-time homebuyers. While lenders will be more than happy to share information about their own programs, you can save yourself a good deal of time by first selecting a professional real estate agent who is experienced in working with first-time buyers in the areas where you plan to buy. An agent who focuses on first-time buyers will know from experience which lenders in your area offer a low down payment program that will meet your unique needs. Today, taking the first step toward owning your own home is easier than before. Your real estate agent is your best resource for finding innovative ways to help you come up with a down payment and qualify for financing. There's certainly no need to wait until you've saved a 20 percent down payment! About The Author W. Troy Swezey is the author of "EASING YOUR WAY INTO HOMEOWNERSHIP: A GUIDE TO LOW DOWN PAYMENT MORTGAGE PROGRAMS." As a Realtor at Century 21 Paul & Associates, he has helped many individuals with their real estate needs. Visit his web site to download his free e-book, "REAL ESTATE SECRETS EXPOSED." http://www.TroyIsMyRealtor.com or mail to: TroyC21@usa.net
MORE RESOURCES: Elon Musk Warns Of A Real Estate Crash: Our Approach Seeking Alpha Signature Bank's New York Real-Estate Problem National Review 8 Best Places to Live in Texas, According to Real Estate Experts Travel + Leisure Eight Must Reads for Real Estate Investors Today (March 28, 2023) Wealth Management $6.29M estate hits market as most expensive home listing in Concord - Charlotte Business Journal Charlotte Business Journal Real Estate Roundup: Jolley Lane home in Marshall goes for more than $800K and other Fauquier County transactions Fauquier Now Michael Saunders makes top 500 real estate ranking Your Observer Here Are NYC's Biggest Real Estate Loans in February The Real Deal Next Dor: From Fashion to Real Estate | Detroit Jewish News The Jewish News The Top Real Estate Companies in Georgia Real Estate Crescent Real Estate exec heads to West Dallas investor The Dallas Morning News Real Estate Transfers (Week of March 27) Times Bulletin How do real estate agents get paid? Stephanie Jones tells us what we need to know when buying a home WLUC Cottage real estate rush slows to a stall Financial Post East Cobb residential real estate sales, March 6-10, 2023 East Cobb News Plan B Investments Buys 70 Property Portfolio from Trei Real Estate Sovereign Wealth Fund Institute Mignon Lagatta Real Estate purchases Reno building | Serving ... Northern Nevada Business Weekly Foreigners Check Out Greek Real Estate Online GreekCityTimes.com Four Jacksonville Re/Max real estate agents honored Jacksonville Journal-Courier Real estate market hits seasonal slowdown in Capital Region The Saratogian Real Estate: March 13 – March 17 Newport This Week Private equity real estate firm acquires St. Mary’s County shopping ... Maryland Daily Record Market Turmoil Slows Momentum for Real Estate Interval Funds Wealth Management Breaking Down Real Estate's Banking Crisis Nightmare The Real Deal Real estate, utilities ETFs see outflows; crypto products lure inflows ... Pensions & Investments Forren retiring from West Virginia Real Estate Commission post Parkersburg News Wilton Real Estate Report (March 17-23, 2023): Five Properties ... Good Morning Wilton HOT PROPERTIES: 79-acre site along I-185 sold GSA Business Real estate plans from candidates Brandon Johnson, Paul Vallas Crain's Chicago Business Real Estate Experts Rank TOP 8 Texas Cities To Live In 2023 Traveling Lifestyle Is Real Estate the Next Shoe to Drop? Investing.com Real estate developer Robert Rosenberg, who died Friday, had ... Greater Wilmington Business Journal Public Records: Muskingum County Real Estate Transfers Zanesville Times Recorder Prairie Land REALTORS® partners with MLS Grid to manage real estate data feeds, standardize vendor licensing Yahoo Finance Real estate professionals crucial to helping sell home Cleveland Jewish News Sheppard Mullin Lands Five-Attorney Real Estate Team Business Wire Tedisco Helps Open New Mechanicville Real Estate Firm The New York State Senate In Duluth, Real Estate Collides With Climate The New York Times 2023 Distinguished Real Estate Award University of Cincinnati State of Federal Real Estate | Transportation and Infrastructure ... The House Committee on Transportation and Infrastructure Link Real Estate Investment Trust : REIT's Rights Issue is 240% Subscribed Marketscreener.com REAL ESTATE | DPW crews rehab salt shed in Hartford, WI | By ... washingtoncountyinsider.com Delray dream run real estate professional Pecotic set to achieve dream by combining work with tennis, sets goal of playing 25 tournaments this year TennisUpToDate.com City Likely to Settle with Ex-Real Estate Adviser For $9.4M Voice of San Diego Tahoe real estate TV show to launch in April Tahoe Daily Tribune Former Tampa Area Real Estate Professional Sentenced To 24 ... Department of Justice Estate Mogul Tied to SF Scandal Buys $15M home The Real Deal Routt County real estate sales eclipse $12.5M from March 17-23 Steamboat Pilot & Today School of Business Launches Online Real Estate Development ... Montclaire News How the Banking Crisis Could Hurt Real Estate Lending Knowledge@Wharton Real estate market appears to be stabilizing Addison County Independent This One Rookie Homebuyer Move Drives Real Estate Agents Crazy Realtor.com News |
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