Got the Down Payment Blues

Providing home loan mortgage financing in Lake, Geauga, Mahoning, Columbiana, Erie, Sandusky, Seneca, Wyandot, Putnam, Hancock, Ottowa, Fulton, Williams, Henry, Defiance, and many more Ohio counties.

Got the Down Payment Blues

Got the Down Payment Blues - Got the Down Payment Blues

The Alt 97, Flex 97 and Flex 100 programs backed by Fannie Mae and Freddie Mac are becoming increasingly popular. These programs require 3% and 0% respectively down payment and as little as $500 toward the closing costs. There are also FHA insured loans that only require 3% and are very flexible about the source of your 3% down payment.

Even with a changing real estate market 80/20 loans are still available with many lenders. Some lenders have changed their credit score requirements on these types of loans lately, but they are still available. An 80/20 loan, also referred to as a combo loan can help consumers buy a home when they have little to no money available for a down payment on a home. 80/20 loans or combo loans also will help you to be able to avoid PMI, Private Mortgage Insurance. These types of loans have been very popular over the last few years and will most likely continue to be a very widely used option for consumers who do not have a down payment.

Down Payment Assistance - One of the biggest topics for first time home-buyers involves down payment money. The questions range from do I need to have any money to make a down payment on a home to how can I get some money to assist with making a down payment. There are many different ways to buy a home with a down payment or without and there are many different down payment assistance programs available throughout the country. Consult your Ohio mortgage broker to find out more information about down payment assistance and home mortgage loan programs for first time home-buyers.

Down payment assistance programs are not a free ride. The buyer is often required to take first time home-buyer classes and meet with budgeting and credit counselors. The process can be lengthy.

Also, the home usually has to pass an inspection performed by the entity offering the down payment assistance. This can also slow down the transaction.

In addition, the buyer is often required to live in the property for a set period of time.

All down payment assistance programs work differently and not all lenders will allow a borrower to use them.

The types of programs that are available to you will depend largely on your credit history. For many first time homebuyers an FHA loan is an excellent choice because it allows your friend and family to assist you in the purchase of a house by providing a down payment "gift" to help you with your down payment. If you do not have any cash to put down yourself, and do not have family who are able to assist you there are plenty of other types of loans available that do not require a down payment at all.

Mny first time buyers look for down payment assistance programs because they erroneously believe they need a large down payment to buy a home. Actually a good loan officer, with the asistance of a good real estate agent, can usually get you 100% financing with liile or no closing costs.

Down Payment Assistance Programs - Down Payment Assistance Programs (DAPs) have become common and necessary for individuals who want to obtain an FHA mortgage without any down payment. In a common practice when purchasing a home, the seller of a home would contribute up to 3% to a charitable organization. A buyer of the home would then receive a 3% grant from the same charitable organization minus a fee (typically $350). The IRS has recently ruled that companies who do these types of transactions can no longer be considered a non-profit organization. FHA required that DAPs may only be acceptable from non-profit organizations, family members, employers, or close friends.

This practice accounts for nearly one-third of all FHA loans. Therefore this ruling will greatly limit the effectiveness of FHA.

To see the IRS rulings and see a list of companies who are no longer eligible, visit http://www.irs.gov/irb/

Some of the most popular include Ameridream, Nehemiah, and Home Down Payment Assistance. As many as 185 non-profits could lose their non-profit status because of this practice.

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