Down payment funding alternatives
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For many buyers, especially first-time buyers, saving up the funds for the down payment can be a seemingly insurmountable hurdle to home ownership. This doesn’t have to be the case. As your mortgage lender, we can help you find creative ways to come up with your down payment.
Using a gift for your down payment
One way to fund a down payment is by using a gift. For many loan programs, a gift may be used for a portion or all of the required down payment. Money given as a gift for a down payment can’t come from anyone. Family members are the usual source. And sometimes an employer may also be acceptable. If this is an option open to you, please let us know. We can help you determine which loan programs accept gift funds for down payments and who may give the gift. We’ll also supply the gift letter that the person giving the gift is required to sign. The gift letter states that the funds are a gift and will not be paid back.
You can buy with zero down payment USDA and VA-Service Member Loans. If you can't find a USDA property you like, or you aren't an eligible veteran, you still have great options. FHA requires 3.5 percent down while you can buy with conventional with as little as 3 percent down. Seller paid closing cost are allowed with all these programs but varies depending on whether the customer pays a larger down payment or not. Under most circumstances the seller can cover most and possibly all the closing cost in a purchase transaction provided the contract states such and the appraised value is acceptable. This is a very common way to reduce your cost to close on your new home. We'll advise you on the best plan for your situation. We do this every day so rely on our experience working for you.
Zero down mortgage loans With USDA and VA 100% Loan to Value are great options
Service persons and veterans can qualify for a VA Loan that requires no down payment. VA Loans are guaranteed by the U.S. Department of Veterans Affairs. In addition to no down payment, these loans usually offer a competitive fixed interest rate and limited closing costs. While the VA does not issue the loans, it does issue a certificate of eligibility required to apply for a VA loan.
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