Down payments have always been one of the main barriers to purchasing a home for first-time buyers. Compared to their parents, millennials face more problems getting the cash they need for a down payment at the same stage of life. This isn’t surprising due to lower personal income and higher student loan debt.
Here, we highlight 3 techniques first-time homebuyers in Texas can use to complete their down payment:
1. Crowdfunding a down payment
Websites like homefundit.com and featherthenest.com allow you to create an online profile and raise money for a down payment.
A mortgage-banking firm, CMG Financial, offers the homefundit.com service. To use this service, CMG Financial must prequalify you for a mortgage. You can then use its crowdfunding tool to collect money for a down payment. In addition, you have a chance for a $1,500 closing costs grant with free homebuyer education.
2. Local and state down payment assistance
Numerous states have assistance programs that are implemented by employers, foundations, nonprofits, and government agencies. Usually, the assistance comes in the form of grants or forgivable, zero-interest loans. The programs may have a geographic focus as narrow as a city or as wide as the nation.
Usually, it’s a matter of matching a program and a property based on the price and location of a home.
However, there are certain misconceptions and myths around this. Some people think, ‘oh, this is just for very low-income households, distressed neighborhoods, in targeted census tracts, and extremely low-cost housing,’ but this isn’t the case.
Often, down payment assistance is combined with favorable mortgage tax breaks and interest rates.
3. Low down payment mortgages
Previously, lenders have preferred a 20% down payment. However, many low down payment choices are available, especially for first-time buyers:
- Conventional loans that aren’t backed by the government, provide down payments as low as 3% to first-time homebuyers who have a good credit rating.
- FHA loansbacked by the FHA agree to down payments as low as 3.5%.
- VA loanssupported by the Department of Agriculture provide 0% down payment options for borrowers who meet the eligibility criteria. They are backed by USDA loans and the Department of Veterans Affairs.
With a smaller down payment requirement, you can purchase a home and start building equity sooner without wasting much time.
Get a first-time homeo wners’ loan in Texas through Z Finance Solutions
Z Finance Solutions help you navigate these first-time home buyer loan programs in Texas, offers down payment assistance, and secures home loans for first-time buyers at a rate that’s in your best interest.
Give them a call now for more information!