DOWN PAYMENT ALTERNATIVES
For many new homeowners, especially first-time buyers, saving up for a down payment can be a seemingly insurmountable hurdle to entering home ownership. This doesn’t have to be the case – with other alternatives to obtaining your down payment, it’s now easier than ever before.
Using a gift as a down payment
In some cases, a monetary gift can comprise a portion or all of your mortgage down payment. Borrowers should keep in mind that money given as a gift for a down payment can’t come from just anyone. Family members are the usual source and, other times, your employer may be an acceptable option. We can help you decide which loan programs accept gift funds and who may give the gift – we’ll even supply an official gift letter.
Down payment assistance charities
Borrowers and home buyers also have the option of seeking out down payment assistance from a variety of nonprofit agencies.
The money donated to a buyer from a down payment assistance charity does not need to be repaid. A good option for buyers with no other means of securing a down payment, consumers should be aware that a donated down payment may inflate the selling price of one’s house. Consult with your real estate professional if you need financial assistance with your down payment, and make sure to research nonprofits to find a reputable organization to work with.
Zero-down/va mortgage loans
Guaranteed by the U.S. Department of Veterans Affairs, both active and retired members of the U.S. military can qualify for a VA loan – that requires no down payment – to use as their new home down payment.
VA loans usually offer competitive mortgage interest rates and keep closing costs to a minimum. While the VA does not issue the loans, it does issue a certificate of eligibility required to apply for a VA loan.