A SPECIAL NOTE REGARDING MONEY FOR A DOWN PAYMENT
There are times when family members are willing to put up the money for the down payment on your purchase. The lenders look very closely to make sure these funds are not required to be paid back. So they ask the family member that is giving the money to write a statement stating it is a “gift” and is not to be paid back. If the money is borrowed with stipulation of monthly payments, then they consider it a mortgage and your Down Payment will disappear.
This is why lenders look at 2 months of bank statements to verify no large deposits have been made recently. If they do see large deposits, this could be a flag as to money being borrowed to do a purchase. Gift money is fine with the bank, but it must be verified and it must be a family member giving the funds.
Special section for FIRST TIME HOMEBUYERS
There are special programs available for the First Time Homebuyer. We have put together some useful topics that may help you determine if you are ready to take that step.
1) FHA (the Federal Housing Administration) is a federal program designed to help homebuyers buy their first home. They have down payments as low as 3.5% and you can purchase a single home, condo, townhouse, or a building with up to four units. They also allow the seller to contribute towards the closing costs so makes it easier to qualify.
2) FHA insures your loan so your lender can pass the benefits on to you, such as lower closing costs, seller paid closing costs, and easier qualifying ratios.
3) If you wish to make your home energy efficient, the FHA can help you with that as well.
4) Manufactured and mobile homes can be purchased through the FHA program with certain conditions. Your lender will provide you with the complete details.
5) Your state or local government may offer programs for the first time homebuyers. These programs may have down payment assistance you can qualify for. Check with city hall and start inquiring about any available programs.
6) Mortgage Insurance may be required. See Insurance for more details.
The lenders and Mortgage Brokers on this site will be more than happy to assist you. Just check to see if they are an FHA qualified lender or Mortgage Broker and they will help you with any questions you may have.
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