The main challenge for most first-time homebuyers is coming up with the down payment. This is difficult when rising rents eat away at potential down payment savings. Here are some options that are often overlooked:
Ask the seller to pay closing costs. It is not uncommon to ask and receive up to 6 percent of the sales price for closing costs. The amounts you can request vary depending on what type of loan is involved and the bank. FHA allows up to 6 percent of sales price and some Fannie Mae loans have caps from 3 percent to 9 percent of sales price. The advantage is that lower closing costs mean you have more money for your down payment.
Research various federal and local government-sponsored loan programs such as VA loans, HUD programs, and Neighbor Impact. VA loans allow you to purchase a home with practically no down payment or private mortgage insurance. HUD has some good programs such as the Good Neighbor Next Door Program and others. The HUD webpage has links to their various home ownership programs. The thing to watch out for in low down payment programs is that they are not accompanied by high personal mortgage insurance requirements.
Crowdsourcing your home purchase is another creative method. There is a website called Hatch My House that has helped raise more than $2 million for down payments. It works like Kickstarter for business, but for your future home purchase. A common way is to ask your wedding guests to provide a monetary contribution to your house via the website in lieu of other wedding presents.
There are lots of programs out there, some requiring personal mortgage insurance and others not, so be sure to do your research. A good realtor and mortgage broker can be invaluable team members in this process.
Home Price Round-up
648 SE Douglas St, Bend, OR 97702
3 beds,1 bath, 1056 square feet,
.16 acre lot | Built in 1978
Listed by A&A Realty
61164 Cone Flower St., Bend, OR 97702
3 beds, 3 baths, 2180 square feet,
.13 acre lot | Built in 2006
Listed by Norwest Realty
3285 NW Horizon Dr., Bend, OR 97703
5 beds, 4 baths, 5264 square feet,
.71 acre lot | Built in 2000
Listed by Bend Premier Real Estate
Photos and listing info from Central Oregon Multiple Listing Service