Uncategorized September 10, 2018

Finding That Down Payment Money

This week the California Association of Realtors (CAR) put out a simple guide of unique ways for potential buyers to come up with down payment funds for a home. This reminded us that this is often a dilemma for many first time buyers.  Figuring out how to get your foot into the housing market with that seemingly hefty down payment is a concern for many people. It is often one of the main reasons many renters never take the leap to become first-time homeowners. So we want to pass along to you below a few of our favorite tips and tricks on finding that down payment money, as reminded to us by CAR this week.

The First Misconception

The first misconception a lot of potential buyers have is the idea that your down payment must be 20% of the purchase price of a home. Although this is common with many home purchases, it is not always a must. In fact, an FHA loan, a mortgage insured by the Federal Housing Administration, only requires a buyer to put down 3.5% of a home’s purchase price. This is a significantly lower amount of cash than a traditional home loan requiring 20% down!

Of course, FHA loans come with a list of their own requirements. The most common being a minimum credit score of around 580 as well as the buyer paying a special mortgage insurance premium each month. But if you can afford the additional monthly cost of mortgage insurance, these loans are a great way to save you a lot of upfront costs. This offers a significantly lower down payment requirement and is one of the main ways many of our clients have been able to take the leap into home-ownership.

Can dealYour Employer Help?

The recent shift among many large companies from employer centered views to employee-centered views has helped to boost Employer Assisted Housing (EAH) programs. Employers are working to remain competitive and appealing to job seekers. These EAH programs help low to moderate-income workers obtain home-ownership through the help of their employer. Most of these programs consist of help with closing costs or assistance with down payment funds. They will vary from company to company.

Check-in with your Human Resources department to see if your employer is part of an EAH program. If you are job hunting, make employer participation in an EAH program part of your search when looking for a new potential employer. Not only does this show you that your employer is working to help better your life in the long term, but it is also a sign of commitment to their employees. Most EAH programs help employees find and fund homes near their employers. This makes participation in such programs a promising sign that these employers are committed to keeping you around as long as you are committed to sticking with them.

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Government Assistance

The U.S. Department of Housing and Urban Development offers a vast array of homeownership programs. These programs offer assistance for a variety of reasons. They range from one’s profession – such as law enforcement, firefighters, and teachers – to programs based upon income, socioeconomic background, veteran status, and many more. These programs vary from state to state. All of the applications to see if you qualify can be easily done online. For a full list of programs check out the website for The U.S. Department of Housing and Urban Development. Search which programs are offered in the state which you hope to buy.

Give Us a Call

If you are looking for additional information on any of the above reach out to The Mower Group. We are happy to answer questions and are here for guidance and advice. We are here to help renters make the leap into first-time home-ownership as well as help current homeowners figure out how to afford that forever home they’ve been dreaming about.