If you want to get a home loan, it will be necessary to make an adequate down payment. It is pretty standard to put down 20% when getting this type of loan, but not everyone can afford to. If you need help getting your down payment together, it is important to know your options. There are numerous ways that you can get this money to buy your new home. This article will go through some of the best options for doing this so you know what your choices are like.
Down Payment Assistance Programs
The whole purpose of down payment assistance programs is to help prospective home buyers with getting the money they need for their down payment. These programs also sometimes provide assistance with closing costs. There are numerous state, federal, city, county and even nonprofit agencies that offer this type of help. The three types of assistance you can get include down payment grants, matched savings programs, and forgivable second mortgage programs.
Down Payment Grants
A down payment grant can help you get the money necessary for your down payment. If you qualify for one of these grants, you won’t have to worry about paying back the money. This form of assistance sometimes extends to closing costs, but not always. Certain nonprofit agencies like the National Homebuyers Fund can provide you with the financial help you need. You could get up to $7,000 with one of these grants.
Matched Savings Programs
With a matched savings program, you will put money into a savings account specifically for your down payment. A bank or nonprofit agency will then match the contribution you make. Many states offer these programs for those who want to buy a home but just don’t have the money for their down payment. The size of the contribution depends on the program, so you will need to keep that in mind. When you are looking for the best agency to help you, this is something you should pay close attention to.
How to Qualify for Down Payment Assistance
Not everyone who applies for down payment assistance is going to qualify, but it’s still something worth looking into. You should check with one of the realtors in your area to see if they can point you in the right direction for this sort of help. These professionals often have certain connections that can work to your advantage.
You will need to keep in mind that there are certain standards and limits when it comes to qualifying for this sort of financial assistance. Whether or not you approved depends on many factors, including your income and the number of people in your household.
A majority of people who get approved for down payment assistance are first-time home buyers. While repeat buyers can get this sort of help as well, you are much better off if you have never bought a home before. Other factors that will affect your chances of getting this assistance include your credit score, debt-to-income ratio, military status and employment. Those who are active military or a veteran have a better chance of approval.
There are certain types of down payment assistance that don’t come with any limits when it comes to how much of your down payment you could get. A loan from the Federal Housing Administration or Department of Veterans Affairs could potentially give you the full 20% down payment, depending on your situation. These are the options that you should look into first.
You should also think about getting the money you need for a down payment from a private lender. A private money loan could be the perfect solution to this particular problem. There are tons of online-based lenders that can give you a loan for a few thousand dollars. It could be enough to get you a home loan right now. One of the best things about these loans is that they are very quick and convenient. If you are approved for a private money loan, you could get the funds you need within as little as one business day.
It is very important to find out what the terms and requirements are for each type of assistance before filling out any applications. This can help you to save quite a bit of time and effort. Every single one of these options will have certain requirements that you need to meet for approval, and you can typically find out what they are online. Make sure that you take the time to fill out each application carefully so you don’t make any mistakes. You also need to be completely honest with the information you submit, because otherwise your chances of approval will shrivel. This information could help you get the home loan you need as soon as possible.