Thanks to the poor ebb and flow or the current economy it is a great time to buy a home. Although there a millions of homes on the market throughout the United States; most consumers can’t qualify to purchase one. Most conventional loans require at least 10% down and to avoid PMI you need at least 20 percent. If you are a first time home buyer or seasoned buyer, and have a good credit score, somewhere between 620 and up you may be able to get some help with a down payment. But how do you get money for a down payment?
State Programs-Most states offer a down payment assistance program for First Time Homebuyers. For example: Georgia offers “The Georgia Dream Program.” Under this program there are three different types of down payment assistance: Standard(All Buyers), Choice (Disabled Buyers) and Pen(Public Service Buyers). The money given under these programs is paid back when the home is sold or refinanced. In some instances the money doesn’t have to be paid back. If you are interested in your state program make sure you do your research. Some have income restrictions and additional stipulations. Look at the counties as well; this may be your ticket to home ownership.
Family-Many buyers go to their families for down payment assistance. Your family may gift you the money for a down payment. In accordance with the IRS, they can gift you up to $13,000 that will be excluded from their tax liability. This can help you to purchase your home without causing a tax issue for your relative. Don’t be afraid to ask your parents for some assistance. Some parents are happy to loan you money; especially if that is their ticket to you moving out.
Veteran Benefits-If you are a military member or veteran who has met the service requirement for a Veterans Administration loan you can get a no down payment mortgage. When you use your VA Certificate of Eligibility to make a purchase; there is no down payment required. The VA does charge a funding fee which is currently 2.8 percent of the amount of the home. If you have any disability percentage the funding fee is waived.
If you want to take advantage of the current market, a down payment may be necessary. There are several ways to come up with the money needed such as family, state programs, and veteran’s benefits if you are eligible. Find a program that works for your needs, do your research and move forward. The American dream of home ownership is still alive and you are entitled to your piece of the pie.