Buying your first home is exciting. It can also be stressful, nerve-racking, and expensive! This is especially true if you plan to put 20% down.
Luckily, you don’t have to let the daunting size of a 20% down payment keep you from your dream of homeownership. You have options. There are a variety of ways you can get help with your down payment.
Down Payment Assistance Programs
FHA loans are loans backed by the Federal Housing Administration. For qualifying borrowers, these low down payment programs make it possible to buy a home while putting as little 3.5% down.
Gift
Do you have a friend or family member who wants to help you achieve your dream of home ownership? That’s amazing. Depending on the program, up to 100% of your down payment can be covered by a gift.
However, it’s important to keep in mind that any monetary gift over $14,000 is subject to the gift tax. Your lender may also require you to keep a close written record of all gift funds received. And, they may require the giver to sign a disclosure letter, indicating the money is indeed a gift and not a loan.
Register
Similar to funding your down payment with a gift, some engaged couples are registering for their down payment. Online gift funds, like Honey Fund, allow friends and family to make small contributions, ultimately equaling a large sum you can put toward your down payment.
VA Loans
For qualified borrowers, VA loans allow you to purchase a home with zero down.
Piggyback Loan
If you haven’t quite saved 20% yet, but are ready to buy, a piggyback loan might be the solution. A piggyback loan is a second mortgage. It allows you to put down 10%, while borrowing 10% to cover the difference.
Ready to explore your options? Contact me and my team today.
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