Purchasing a home is, no doubt, an exciting experience, especially if you are a first-time homebuyer. However, there is one thing that needs your thorough consideration, and that is the “down payment.” According to a survey conducted in 2018 on the rental market place, approximately 61.7% of millennials cannot afford a high down payment. However, if you heard the saying “when there is a will, there is way,” it cannot be truer than this scenario.
Simply put, as a homebuyer, you can receive help from different down payment assistance programs designed specially to help people transition from renters to buyers. This option is great if you want to become a property owner. Luckily, if you live in Austin and are struggling to put together the money for the down payment, some reputed mortgage brokers, such as “The Mortgage Network,” can help you.
However, understanding the rules for down payment assistance is important to make an informed decision.
In Austin, the down payment assistance (DPA) is a program that offers zero interest loans to eligible homebuyers (who are purchasing homes for the first time). The program is for people who want to buy a house in Austin. Would-be homebuyers can have access to assistance programs through a trained loan officer registered with participating lenders.
Remember that only a trained loan officer can submit down payment applications on behalf of potential homebuyers.
The down payment program provides would-be homebuyers with grants to cover all or some part of the down payment. There are programs that cover closing costs. Typically, the lender pays this money when closing the sale. In Austin, Texas, eligible buyers receive a 5% closing cost and down payment assistance on their loan.
These down payment grants provided to would-be homeowners are closing cost funds. Homebuyers do not need to repay them. Some national down payment programs that provide grants to homebuyers include the National Homebuyers Funds and the Dream Makers Military Funds. They offer down payment assistance up to $5,000 to qualified members.
Saving programs for down payment assistance work differently. These programs require a contribution to a down payment saving account and a matching entity. A nonprofit agency and bank also make matching contributions to saving accounts and matching entity.
A homebuyer is eligible for a second mortgage down payment if he/she does not qualify for grant programs. Forgivable mortgage programs charge interest but may offer homebuyers a 0% interest loan. They forgo the additional cost if the homebuyer meets certain requirements. The State of New York Mortgage Agency, for example, provides second mortgages with 0% interest rate with zero monthly payments. They forgive the loan after ten years when you continue to live in the house.
Down payment assistance is a huge help for the people who lack sufficient funds for buying a property. The programs mentioned here have a few qualification requirements and can offer you down payment assistance to help you fulfill your dream of buying a home.