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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: Jake Paul Closes One Of The Largest Real Estate Deals In Georgia History With $39 Million Purchase of 5,600-Acre Ranch Yahoo Finance A tale of two Floridas: Real estate industry torn over DeSantis' push to eliminate property taxes Fox Business These are the forgotten NYC nabes that became real estate hot spots in the last decade: report New York Post Dave Ramsey Saves Listener With $1 Million in Her 401(k) From Becoming a ‘Victim of the Real Estate Market’ Realtor.com Hoby Hanna: Zillow is ‘overstepping,’ limiting ‘creativity’ - Real Estate News by RealEstateNews.com Hoby Hanna: Zillow is ‘overstepping,’ limiting ‘creativity’ Real Estate News by RealEstateNews.com What renters really want | Real Estate Newsletter Inquirer.com Real estate inquiries by wealthy New Yorkers into Florida properties jump 50% after Mamdani primary win Fox Business RNR Real Estate Briefs — Texas & more Realty News Report Real Estate Newsletter Articles this Week: Months-of-supply is higher than the previous 8 years! Calculated Risk Real Estate: Immaculately Maintained & Move-In Ready Home sanangelolive.com NYC Real-Estate Execs Throw Money Behind Adams to Counter Rise of Mamdani The Wall Street Journal Golfer Bryson DeChambeau's Massive Real Estate Investment Has Eaten Up Most Of The $125 Million He Got Paid To Switch Tours Yahoo Finance Buyers wary of surprise HOA costs now have a safety net Real Estate News by RealEstateNews.com Compass to share exclusives — if brokers, MLSs play by 2 rules Real Estate News by RealEstateNews.com 'Married To Real Estate' Canceled After Four Seasons On HGTV, Say Hosts Egypt Sherrod & Mike Jackson Deadline Senior Spotlight: The Grand Junction Daily Sentinel Tampa real estate investment firm under investigation for potential deceptive practices Florida Politics Real estate investors are purchasing more U.S. homes as high prices lock out would-be buyers CBS News Mortgage Rates Predictions for the Next 6 Months: August to December 2025 Norada Real Estate Investments $400 Million Family Lawsuit Involving Prominent Fullerton Real Estate Figures Part 1 Fullerton Observer SERHANT. hits DC; Elliman snags ‘Million Dollar Listing’ star Real Estate News by RealEstateNews.com 2025-2030 Five-Year Housing Market Predictions U.S. News Real Estate Department of Taxation and Finance dos.ny.gov The Michael Houck Real Estate Guide for July 13th Oil City News Real estate sales in Peoria, Tazewell and Woodford counties for July 12, 2025 Peoria Journal Star Top 10 most expensive homes sold in Petaluma last week The Press Democrat OT Real Estate Spotlight of the Week: 1555 Graves Lane The Owensboro Times Mortgage Rates Today – July 12, 2025: Rates Rise Across the Board for All Loan Types Norada Real Estate Investments Here are recent property transfers up to $970,000 St. Albans Messenger Confusing housing stats & real estate nerds Sacramento Appraisal Blog Real estate boss targeted in San Francisco with smear campaign The San Francisco Standard Real estate CEO warns of growing ‘exodus’ as people have ‘given up’ on California — but where are they going? Yahoo Finance Agent Spotlight: Katie Coleman The Grand Junction Daily Sentinel How downtown Natick MA has become a focal point for redevelopment MetroWest Daily News Despite signs of market rebalancing, real estate in this NJ town remains hot. Here's why Bergen Record Here are businesses on the move in Marin, Solano, Napa, Sonoma and Mendocino counties The North Bay Business Journal Top B2B Platforms Transforming Tokenized Real Estate Markets Herald Property transfers: Marion County sales range from $20K to $390K The Marion Star Where are home prices falling most in America? This SWFL community made top of the list Naples Daily News Home prices in Colorado Springs hit record high, even with many homes for sale Colorado Public Radio Blackstone, PSP reportedly among consortium in talks to acquire H&R Real Estate Investment Trust Pensions & Investments Page C4 Post and Courier Page C2 Post and Courier Page C6 Post and Courier Page C5 Post and Courier Page C10 Post and Courier Page C11 Post and Courier Page C3 Post and Courier Page C12 Post and Courier Landmark Tax Reform Brings Major Wins for Real Estate National Association of REALTORS® Wichita Falls ISD teams with Bishop Real Estate to sell Kirby Middle School Texomashomepage.com |
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