Top Ways to Get Your Down Payment

The most common issue for a first time buyer usually seems to be…"How do I get the money needed for down payment on a home purchase":

1. Get A Gift – With FHA, the buyer can get a give from a relative for the down payment and closing costs. 
2. Down Payment Bridal Wedding Registry – Gives a couple an opportunity to received wedding “gifts” through a dedicated bank account to collect down payment funds for a new home
3. 401K Loan – You can borrow the money from yourself, in most cases this loan will not count against your qualifying debt to income rations and as a first time home buyer the most 401K programs will allow for this transaction,
4. Life Insurance – If you have whole life policy you can either borrow against it or cash it in.  
5. Secured Loan -  If you have an asset that is free and clear such as a vehicle you may be able to get a secured loan against the value of the asset.
6. DPA – Several government entities offer down payment assistance programs for first tie home buyers
7. Sale of Personal Property - With verification of value and bill of sale, the funds form the sale of personal property can be used for the down payment.
8. Human Resources – Some employers offer down payment assistance as a benefit to the employees.  These awards are eligible for down payment through FHA financing.
9. Tax Refund – A buyer can use this years tax refund to become a homeowner.  A copy of this years tax return and a copy of the refund check or bank statement showing the amount of the refund on the deposit is all that is required.
10. Second Job – Even though we may not be able to use this income to qualify the borrow if the borrower has not had the job for 2 years, the cash earned from the second nob can be used for the down payment.
11. Savings/Budgeting – Cutting back on extras along with anyone of the abve mentioned ideas will get you into a home faster.

There are some many reason why now is the best time to purchase your first home.  Please contact me to find out more.

Down Payment Help for First Time Home Buyers

"Water, water everywhere, nor any drop to drink." Rime of the Ancient Mariner 

If you're a first time home buyer, you might be able to sympathize with this statement. Thanks to the recent economic recession, there is no shortage of affordable homes, yet due to the mortgage crisis, lending has become tight. Prior to 2007, putting no down payment on a home was a common option for first time home buyers  However, with mortgage lending practices coming under fire in recent years, the option to finance 100 percent has lost popularity. In today's market, a typical down payment can range anywhere from 10 to 20 percent; however, in this economy, few people have that much cash available to them. Fortunately, there are ways to receive down payment help for first time home buyers, either through a third party lender or private funding.

Where Can You Find Down Payment Help for First Time Home Buyers? 

Junior Loans: One option for first time home buyers who need down payment help is to apply for a Junior Loan. Many banks offer Junior Loans to help first time buyers who would otherwise be unable to meet the down payment requirements for purchasing a home. These loans are typically offered at the state level, are under $50,000, and have fixed interest rates.

Gifts and Gift Registries: Instead of using a traditional bridal registry, many couples who are also first time home buyers are opting to register for a home down payment gift registry. This allows family and friends to donate funds toward a down payment, helping newly married couples reach the goal of owning a first home. To find out more about a home down payment gift bridal registry as well as a graduation or birthday gift registry, check out myregistry.com or downpaymentdreams.com.

Other Down Payment Assistance Options

Tax Refunds: Buyers who are receiving a refund on their income taxes can choose to put the extra cash toward a down payment. It's a great way to make use of money you were not expecting to receive, and depending on how much you choose to withhold each year, can easily contribute to a large portion of your down payment.

Seller Negotiation: Another option may be to negotiate with the home seller for a donation of down payment funds. In a slow real estate market, many sellers may be willing to negotiate nontraditional payment terms or purchase agreements. Some home sellers might even consider offering you a portion of the down payment rather than lower their selling price.

First time Home Buyers Tax Credit - $8,000 of tax credit was available for first time home buyers in 2010. A $6,500 tax credit for repeat home buyers was also available, yet both of these incentives have expired. However, service members who were on official extended duty outside of the United States for at least 90 days between Jan. 1, 2009 and May 1, 2010 may qualify for a one-year extension, which could be a great opportunity to leverage funds for your down payment. 

Still Strapped for Cash? 

Consider 100% financing with mortgage lending practices coming under fire in recent years, the option to finance 100 percent has lost popularity. Yet there are still programs available to first time home buyers requiring down payment assistance who meet certain eligibility requirements.  Before you throw in the towel on your home search, see if you may qualify to purchase with no down payment.

Buying a home is without a doubt one of the biggest decisions a person can make in a lifetime. It's a large responsibility and all down payment and home financing options should be considered carefully. Before taking a loan or getting knee-deep in a large mortgage, be sure to do a thorough assessment of your financial situation and ensure that you can afford the home you have in mind. With the right financing and adequate information, you'll be able to move confidently into home ownership.

Possible New Downpayment Requirements for FHA

According to newswire, the House Financial Services Committee have drafted a bill to raise the minimum down payment for Federal Housing Administration-backed loans to 5 percent as well as cut FHA loan limits in many markets.

The current minimum requirement for most home buyers is 3.5%

To read the entire article click here. To find out about homes in your area, click here.

Monetizing the First Time Homebuyers Tax Credit

A new program that the Texas Department of Housing and Community Affairs (TDHCA) released on Monday, June 22nd. Many buyers may already know, the American Recovery and Reinvestment Act of 2009 provides a federal tax credit to first-time homebuyers that is equal to 10% of the purchase price of their home up to $8,000. In an effort to monetize the tax credit, TDHCA created the “90-day Down Payment Assistance Program.” If you have questions about this program, please contact me.

Austin Down-Payment Assistance Program

The Down Payment Assistance Program (DPA) provides qualified, first-time homebuyers, with a zero interest loan to assist with purchasing a home located within the Austin City Limits. DPA funds cover the down payment and eligible closing costs and pre-paid expenses associated with buying a home.

The DPA Program options are as follows:

Standard DPA: Up to $10,000 in a deferred, forgivable, 0% interest loan for 10 years. Up to $1,000 additional for borrowers in a Mortgage Credit Certificate Program and up to $4,999 for people with disabilities. The loan is forgiven if the borrower remains in the home ten (10) years without transferring title. Otherwise the loan is due and payable if the borrower sells, leases, transfers title, refinances, gets a home equity loan, or pays off the first lien within ten (10) years.

(NEW) Shared Equity DPA: Up to $40,000 in a deferred,0%-interest loan for 30 years. Borrowers must pay back the DPA loan plus a percentage of their equity (that is the same percentage as AHFC's contribution) when the borrower sells, leases, refinances, gets a home equity loan, pays off the first lien, or otherwise transfers title within 30 years. When selling the home, the borrower agrees to give AHFC the chance to purchase the house at market rate ("right of first refusal").

For more information you can visit: http://www.ci.austin.tx.us/ahfc/first_dpa.htm