4 WAYS TO GET READY FOR A DOWN PAYMENT

August 10, 2022

 
One of the most difficult aspects of buying a home is coming up with a down payment—the huge sum of money needed to get a mortgage.
 
Fortunately, most lenders today provide down payment alternatives of 5%, 10%, 15%, or 20% of the home's purchase price. A government FHA loan can be acquired for as little as 3.5 percent down for many first-time homebuyers. If you are a member of the military or a veteran, you have even more budget-friendly options.
 
Many home purchasers use their savings to make a down payment, and they frequently put off significant purchases to save money. However, there are a few more options for raising funds.
 

1. Gifts From Family or Friends


Some loan types allow "gift" funds—money provided to you—to be used as a down payment. The person giving the money must have no financial stake in the property, and the monies must be a genuine gift accompanied by a letter. If the present is a debt that must be returned, banks will not allow it.
 

2. Assistance With a Down Payment


For further information, contact your lender or the state housing commission. Many local and state government programs offer down payment aid for borrowers in need.
 

3. No-PMI Home Loans


There are a few loan options that allow you to put down less than 20% without the added PMI cost. Check with your lender to see if it offers a low-down-payment, no-PMI product if a 20% down payment seems too challenging.
 

4. Make It a Habit to Save


Starting a down payment fund now is a certain method to make your down payment.
 
If you need assistance with your home-buying process, contact our team today, and let's start working on your dream. 

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The Terrill Team of Northrop Realty, A Long & Foster Company specializes in serving buyers and sellers of residential and commercial properties throughout Delaware and Maryland. With an initial focus on the beaches, our coverage expands through Worcester and Wicomico County in Maryland, as well as Sussex county in Delaware.