Here are several things that you can use to your advantage when wanting to gather the “downpayment” for your home purchase.
First – First Time Buyers have to come in with the same down-payment amounts as everyone else. (there are some “snake oil” sales people that would have you think differently)
The prevalent types of loans that are available in the world are:
- Conventional – Usually needing a 20% down payment.
- FHA – 3.5% down payment.
- VA – Some associated costs – but the least money required in the form of a down-payment.
- Gifts – These work well and usually come from the first time buyers family to give them their start in life.
- Credit Cards – We have seen this type of “down-payment” gathering – but not very often – with interest rates quite high in the realm of Credit Card Companies – it is not the best choice.
- Saving – With preparing for home purchase – most people can sock away a bit of savings each month. If the “down-payment” amounts don’t change( increase ), this will serve you will after several months – you will have the amount needed.
- Tax Returns – this one is key, sock it away as if you were not expecting it and after a couple of years – you will be good to go.
- Escrow – The Buyers part of Escrow (usually 1% of the purchase price)
- Title Insurance – The Buyers part of Title Insurance (usually 1% of the purchase price)
- Lenders Fee – (seller does not have this cost associated with their sale as part of their closing costs) – However, you as a buyer are not paying a real estate agent’s commission either. The Real Estate commission for the Sellers Agent and the Buyers Agent (those representing you) are always picked up by the Seller.