4 Common Down Payment Program Myths Debunked
If you’re the newbie buyer on the block right now, it’s tough out there. How can you be more competitive when you’re up against tight inventory and higher prices? Plus, if you’re currently renting, you don’t have equity from a home sale to help fund your down payment.
These six ideas can help you (finally!) score a home of your own.
Saving is always good, but you don’t need to wait to save for 20 percent down. The good news is there are many low down payment loans and down payment assistance programs available to help you get in a home sooner.
You just need to get your home financing plan together so you can act quickly when the right home becomes available. Start by first seeing if you may qualify for one of the more than 2,300 homeownership programs available across the country. You can also ask your agent and lender about options in your community. And, don’t forget to check with your employer – some offer Employer Assisted Housing programs as an employee benefit.
Time to go back to school. Don’t worry, there won’t be a test and you can often do homebuyer education online on your own time or in a few blocks of time over a weekend. Online counseling options, such as eHomeAmerica, cost approximately $75-$100. With that fee, you also get access to planning documents, videos and other resources after the course is completed.
It might feel like you need to get out in the market immediately, but data shows that homebuyer education and counseling builds successful long term homeowners. Plus, most down payment programs require the recipient participate in homebuyer education so you’ll be a step ahead.
Ironically, we shop around for everything from appliances to mascara, but we don’t shop our home loan — one of the largest financial decisions we’ll make.
Interview at least three lenders – start with our 5 essential questions for your lender if you need help. Get pre-approved by your lender of choice — in a fast market, you need more than just pre-qualification. You need to show that you are actually approved for a home loan.
Buying a home is one of the biggest financial decisions you’ll ever make. You need to be sure you have a good team on your side. Finding a real estate agent may feel overwhelming, but there are ways to narrow your search.
Ask your loan officer for a referral. Tap into your own network of friends and family who may have recently purchased a home. Or you can always search online for real estate agents in your area. Just make sure to do your research and interview a few candidates. It’s important that your agent has experience with your specific needs, especially if you’re using a down payment program.
Technology is your friend — automate that home search. Talk to your agent about setting up alerts so you know as soon as a listing is online. You can also sign up for accounts at the major listing portals like Zillow, Trulia and Realtor.com and register for alerts when new homes come on the market in your area. In a tight market, you want to be the first to know.
What if your offer doesn’t get accepted? If you’re a first-time homebuyer, it may be harder to compete against multiple offers in a fast moving market. Consider looking at “stale listings” — these are listings that may not have sold in the first few days, weeks or months on the market.
With everyone rushing to listings when they first hit the market, it can pay off to go back and revisit homes that were overlooked. If you are open to other home styles, neighborhoods or homes that need some love, you might be more competitive on the second look.
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