Do you need Down Payment Assistance?
- NOVA has several Down Payment Assistance programs available depending on location of the subject property, borrower credit score, and other criteria. Please ask!
Ways to Accumulate a Down Payment
One of the biggest problems facing buyers today is coming up with the money for the down payment and closing costs. The amount of money you have can greatly limit or increase your purchasing power. Rather than saving all of the money on your own, there are options that may help. Here are some ways to accumulate the necessary funds that are acceptable to most lenders.
- GET FUNDS FROM FAMILY MEMBERS - Documentation will be required to prove that the money is actually a gift and not a loan. Any taxpayer is permitted to give up to $10,000 and give your spouse $10,000. Your father can do the same. This would give you $40,000 for a down payment and closing costs. (NOTE: Unless you are putting down at least 20% or obtaining a government-insured loan, 5% of the sales price must be your own money.)
- BORROW AGAINST YOUR 401K OR INSURANCE POLICY - You can also cash out your 401K, but it will be subject to withdrawal penalties and payment of taxes. If you borrow against it, the loan payment will be counted as you qualify with the additional debt.
- SELL OR BORROW AGAINST AN ASSET - Selling an asset such as a car can help increase the amount of money you have available. Borrowing against an asset is also acceptable as long as you qualify with the additional debt.
- OBTAIN A LOW POINT OR ZERO POINT LOAN - This will reduce the amount of your closing costs substantially. In some instances, the lender can also pay all or part of your non-recurring losing costs.
- ASK THE SELLER TO PAY FOR ALL OR PART OF YOUR NON-RECURRING CLOSING COSTS - Your real estate agent can assist you with this when you make an offer on a home.
- CONSIDER DIFFERENT LOAN PROGRAMS - I can help you in determining the best loan program to suit your needs. There are a wide variety of programs that require lower down payments and assist with closing costs. There may also be city and county down payment assistance programs.
- USE YOUR TAX REFUND!