Short of Cash for a Down Payment?

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You’d think that with the record low mortgage interest rates and low home prices that buyers would be out in droves, snatching up every available property.  Houses are selling right now, without a doubt.  Many industry insiders are even starting to offer glimmers of hope that the market may be starting a gradual rebound.  But there are many potential buyers who are still sitting on the sidelines.

So what would you think might be holding some people back from buying?  There are actually a few answers to the question.  One is that many people have a home they must sell before they can buy a new one.  Some people still don’t trust the economy and their job security enough to buy a house.  Another reason, and the one we’re going to address today, is that some people who are ready to buy just simply do not have the cash available for the down payment.  It could also be that some people assume that you must have 10 or 20% available for a down payment.  That just isn’t the case.  You may be able to pay as little as 3.5% down with an FHA loan.  But what if you don’t even have that much?  Read on for the answer!

Buyers who are short of cash for a down payment should not simply give up their dream of home ownership!  You should contact a knowledgeable real estate agent who has access to, and is familiar with, something called “Down Payment Resource”.  This is a program that will identify all forms of down payment assistance that is available for specific properties.  Most are loans with very attractive interest rates and repayment terms.  Many of the assistance types available have specific income limits, geographical limits, dwelling type limitations, or possibly other limits.  Nevertheless, it’s worthwhile to check with your real estate agent and ask what properties are available that meet your requirements AND which have DPR assistance available, then see if you meet all the requirements.  You never know.  It does happen and people are finding that they can buy homes that they had previously thought they couldn’t because they didn’t have enough cash.

If you’d like more information on DPR, what down payment amounts are required for various loan types, or if you’d like to begin searching for a DPR qualified home, contact me and I’d be happy to help.  Just click on the “Contact Me” link above.

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About Bob Gilbert, GRI

Realtor with Edina Realty, Prior Lake, MN
This entry was posted in First Time Buyers, Home Buying - General and tagged , , , , . Bookmark the permalink.

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