Top Sources for the Down Payment When Considering Home Ownership

You’ve read or heard it many times recently about how now is a great time to buy a home because of the low interest rates, plentiful inventory, etcetera, but have probably pondered how that ubiquitous news helps you if the funds for the down payment seem out of reach.  Where can you find the down payment for a home?  Fortunately, resources may be available to credit-eligible borrowers who have an interest in the freedom, stability, wealth building and higher quality of life often associated with home ownership.

Buy with No Down Payment or $100 Down

The typical down payment asked of most borrowers toward the purchase of a property could be as low as 3.5%, but would you believe that there are still some instances when no down payment is required?  VA Loans (often available to those who served in the military), USDA Loans (available to those who are looking to buy in designated rural areas) and doctor loans (available to licensed, practicing physicians) are all zero-down mortgages while some HUD-owned properties may be purchased using an FHA mortgage for as low as $100 down.  These loan programs can ease the path to home ownership without a lot of funds required of the borrower out-of-pocket.

Check Down Payment Assistance and Closing Cost Assistance Resources

Credit and income-eligible home Georgia buyers who intend to use the property for owner occupancy may qualify for up to $25,000 in down payment assistance and closing cost assistance to help them either buy their first home (in three years) or upsize to a choice among several properties that have been completely renovated through the neighborhood stabilization program.  Grants for first home buyers are also available as down payment assistance and closing cost assistance provided the borrower intends to occupy that first home for five years.  Please call or write for a list of participating lenders that can get the transaction closed smoothly and within an acceptable time frame.

Access Your 401(k)

Your retirement fund may be the best source to fund the down payment and closing costs required to purchase a home, either through a loan or hardship withdrawal.  Once your offer is accepted, most administrators will ask for a copy of the purchase agreement and then issue the requested funds shortly thereafter.  The process is often fairly simple, but please include your 401(k) administrator, trusted financial advisors and preferred mortgage lender in your plans before presenting an offer.

Get a Gift from Your Family

The bank of mom and dad may yet again be an option to home buyers, but the process of obtaining those funds must be managed carefully.  The best approach may be to get those funds into your accounts a minimum of 61 days prior to applying for a pre-approval so that they already appear on the two most recent bank statements that the mortgage lender will ask of you.  If you find, however, that a gift will be needed within those 61 days, please ask the lender for instructions on how to receive those funds before they are deposited into any of your accounts.   

Home buyers should budget for the typical out-of-pocket expenses regardless of their chosen method of purchase.  Earnest money in the amount of one-percent of the purchase price, while not required, should accompany your offer in order for it to be seriously considered.  In addition, most lenders will require the appraisal fee of around $500 once an offer has been accepted.  You should also plan to invest around $350 into a home inspection within the first ten days of offer acceptance.  The home inspector will ask that the utilities be connected prior to the home inspection and there may be fees associated with those connections.

So there you have it, ways to obtain the down payment required to enjoy home ownership in Georgia.  Please call or write for more details on these programs and get a list of participating lenders who will help you with the pre-approval process today.

Solomon Greene
Georgia Real Estate Brokers Associate, REALTOR®
Keller Williams Realty Atlanta Partners
(678) 775-2677
http://www.AtlantaDownPaymentAssistance.com