Articles Tagged With: Down Payment

June 24, 2022

Planning Your Home Loan

The planning stage of your home loan is extremely important. This is where you will determine what kind of home you might want, the price range you can afford, and how much down payment you need to save up to make. One big choice you face in the planning process? Decisions about issues related to long-term occupancy of the home, whether you plan to sell within a short or long amount of time and how you should arrange your financing to accommodate those needs. What kind of arrangements? Some borrowers don’t apply for a fixed-rate mortgage. They know they are not keeping the home for the long term and choose to take advantage of lower interest rates offered in the introductory period of an FHA Adjustable Rate Mortgage (ARM) instead | more...

December 9, 2021

Do You Need Down Payment Assistance For Your Mortgage?

By Joe Wallace

If you want to buy a home and you worry about the down payment, you may be able to get help from a state or local down payment assistance program offered in your housing market. If you are considering an FHA mortgage, you should know that the FHA itself does not offer down payment help, but does recommend borrowers seek such programs to help lower the overall upfront cost of the mortgage. What kinds of down payment help is available? There are many options depending on the state where you live and whether or not you have owned property recently. One issue that is common for many state-level down payment assistance programs? Being either a first-time homebuyer who has never owned a home before, OR being a former homeowner who | more...

October 8, 2021

Important Issues About Buying A Home With An FHA Loan

By Bruce Reichstein

What are your concerns about buying a home with an FHA home loan? For some, it’s about how much the loan will cost month-to-month, while for others the issue of the loan’s long-term cost can be a worry. If you aren’t sure how the FHA home loan program works, you’ll definitely want to read on. What You Can Buy With An FHA Mortgage In general, FHA home loans are for owner/occupiers who want to buy a home to use as their primary residence. You can buy a property with as many as four units as long as it meets FHA minimum standards and you are financially qualified for the mortgage loan. FHA loan applicants may apply for any type of FHA loan offered by a participating lender including mobile home | more...

September 22, 2021

Buying A Home: Your Down Payment

By Bruce Reichstein

What are the rules for FHA loan down payments? Some first-time homebuyers looking for a first home don’t realize you can’t just make the down payment by providing a check to your lender. There are strict rules about down payments–they must come from approved sources, they must be accompanied by any supporting documentation showing where the money comes from, etc. You, the borrower, are allowed to apply for a home loan and make a down payment on the house you make an offer on, but when you make that down payment you must document the sourcing of the money. As in, where did it come from? A cashed-in investment? That’s permitted under FHA loan rules. Did your down payment money come from a pink slip loan or a credit card | more...

July 13, 2021

FHA Loan Down Payment Facts

By Joe Wallace

Some borrowers get nervous about having to come up with a down payment. It is more than some have spent on one thing in their adult lives all at once, who can blame them for worrying? FHA home loans permit down payment gifts and grants and that can be a huge help for the first-time homebuyer. The rules for these programs must clearly explain the conditions of the grant or gift, under what conditions it might be required to be paid back–those payback terms of often triggered by violating the terms of the agreement. It can also happen when the home is sold, paid off, or no longer used as the primary residence. Such gifts may come from state or local housing development agencies or other local entities–remember that the | more...

July 2, 2021

Down Payment Help For Your Home Loan

By Bruce Reichstein

If you need a home loan but worry about the down payment, you may be able to take advantage of state-run or locally operated down payment assistance programs in your area. The FHA home loan program itself does not offer down payment assistance so you will need to find a local program that can help. What should you know about down payment assistance programs? For a start, these programs can be used with an FHA mortgage to purchase an owner-occupied single-family residence. In some cases you may be able to purchase a home with more than one living unit, but occupancy is a requirement both for the FHA loan program for single families as well as many down payment assistance options. For FHA loans, the minimum required 3.5% (of the | more...

June 8, 2021

What To Do If You Need Down Payment Assistance

By Bruce Reichstein

Some borrowers worry that they can’t save up enough money for their home loan down payment. Fortunately, many states feature programs that can help these borrowers who may otherwise qualify for an affordable home loan but struggle with their down payment requirement. If you are considering an FHA mortgage but need down payment help, there are programs offered by state and local agencies that may be able to help you soften the economic blow of that 3.5% down payment requirement imposed by the FHA. Not all down payment assistance meets FHA loan guidelines–you’ll need to make sure that whatever the source of your down payment assistance, you meet the sourcing requirements for the money. That means having a clear paper trail from the person providing your down payment assistance. Your | more...

June 4, 2021

FHA Home Loan Down Payment Assistance

By Bruce Reichstein

Do you worry about making a down payment on a home loan? There are home loans that require higher down payments than others but the FHA loan program requires only 3.5% down for borrowers with qualifying FICO scores. FHA loan rules in HUD 4000.1 say: Borrowers with FICO scores at 580 or higher qualify for the lowest down payment. Borrowers with FICO scores between 500 and 579 are required to put 10% down. These are FHA guidelines, not individual lender standards. FHA home loans don’t have a zero down payment option, but FHA construction mortgages allow the borrower to use land equity as part of the down payment where applicable. But borrowers don’t always have to make the downpayment themselves thanks to down payment assistance programs that can help. Here | more...

May 18, 2021

Home Loan Down Payment Assistance Programs

By Joe Wallace

If you need a home loan but are not sure about being able to make your down payment, you may have help waiting for you in the form of a local home loan down payment assistance program. These are offered by a variety of entities including state housing agencies and can help first-time borrowers and those who have not owned homes before in the last three years. They may also be offered to those who don’t meet either of the criteria listed here, depending on circumstances. What do you need to know about down payment help? The first thing to know is that the terms and conditions will vary from state to state and even from agency to agency. There are no standardized offerings for down payment assistance. Some borrowers | more...

May 12, 2021

Down Payment Sources: The Rules

By Joe Wallace

Are you struggling to save enough money for a down payment for a home loan? It’s tempting to turn to quicker sources of funds for that minimum required investment, but FHA loan rules say some potential sources for down payment money cannot be used. Those prohibited sources include considering cash advances from a credit card, payday loans, and certain other sources for a larger sum of money that can be used for a down payment including down payment “gifts” that actually have an expectation of repayment. The guidelines that cover these downpayment issues are found in HUD 4000.1, also known as the FHA Lender’s Handbook. The rules? For any type of FHA loan that requires a down payment (a new purchase loan, an FHA One-Time Close construction mortgage, condo loan, | more...