Down Payment Assistance Options
Many people predicted the pandemic would put a huge damper on real estate sales. Instead, the housing market is red hot. Much of this is because mortgage rates have remained at historic lows. A lot of people have jumped at the possibility of saving money over the life of their loan. However, even though home sales are up dramatically, there are still many who are sitting on the sidelines. Millennials in particular are interested in buying a home, but haven’t taken the plunge. A survey conducted by Point2Homes suggests that 74% of millennials are interested in buying a home in the next 12 months. The same survey points out that 88% of millennials do not have enough savings to cover the average down payment. Many aren’t aware that down payment assistance is available and might make your dream of owning a home more realistic than you think.
What Is Down Payment Assistance?
Down payment assistance is exactly what it sounds like. They are programs run by states, localities, and other entities that help potential homebuyers with securing a down payment to get a home. According to Down Payment Resources, there are over 2300 programs that help potential buyers secure a down payment. Even better, over 81% of these programs currently have funds available to provide help with down payments.
Can Anyone Get Down Payment Assistance?
Many people do not search out programs that provide down payment assistance. Either, they assume that these programs are for first time home buyers or they don’t even know that they exist. The wonderful part about many of these programs is that they are not exclusively for first time home buyers. Each program has their own sets of qualifications. However, with over 2300 different programs, there is always a possibility that you might meet the qualifications they require.
This is why it is important to speak to an experienced mortgage professional long before you are interested in buying a home. Experienced mortgage professionals are aware of many government and private programs that meet your needs. Many people miss out on these programs because they assume they won’t qualify without even speaking to a professional. Never disqualify yourself from getting your dream home. It is always best to speak to a mortgage professional even if you do not think you are ready. That way you know exactly what options are available to you.
Are There Options Other Than Down Payment Assistance Programs?
In the event you do not meet the qualifications of the down payment assistance programs there are other options. These are specialized mortgage programs offered by the federal government that you might be in a position to take advantage of.
FHA Loans
FHA loans are a program run by the U.S. Department of Housing and Urban Development. This program is designed to make it easier for first time home buyers to get a mortgage. The federal government backs these loans, which are offered by private lenders. This program is terrific and can make buying a home a reality even if you do not have the money for a large down payment. You can get a FHA loan with as low as a 3.5% down payment depending on your credit score.
VA Loans
VA loans are a program run by the U.S. Department of Veterans Affairs. These loans are offered to military service members and their spouses. VA loans require no down payment whatsoever and often come with very competitive interest rates. Not everyone can qualify for a VA loan. However, if you do, it makes owning a home much easier, even if you do not have the savings for a large down payment.
USDA Loans
USDA loans are a program run by the United States Department of Agriculture. This program is designed to encourage home purchases in certain rural and suburban areas. These loans also offer zero down payment options. Given that many are working and schooling from home because of the pandemic, this might be an attractive option. Not every suburban or rural home can qualify for one of these loans, so it is always best to consult your mortgage professional.
Final Thoughts
Rock bottom interest rates mean that the time is right to try and buy a home. If you’re interested in owning a home in the near future then you should talk to an experienced mortgage professional. Do not assume that because you do not have a large sum of money stashed away for a down payment that buying a home is beyond your reach. Do not disqualify yourself for a mortgage before you have even explored your options.
Even if you do not think you are ready to qualify for a mortgage, you should still reach out to our team at Peoples Choice Mortgage. We can tell you about all of the programs available ranging from down payment assistance to specialty lenders. You might be right that you do not qualify for a mortgage at this time. However, we have the tools and expertise to coach you on what you can do to eventually get to where you want to be.