If you’re reading this most likely you are considering buying a home, and because you are here you have done a considerable amount of online research into basic loan requirements.  Good for you, because most home searches start online and it can be difficult to find the proper information, nothing beats talking to a  Qualified loan officer to figure out exactly what is needed; but this article may be useful in determining if down payment assistance is right for you.

With home prices increasing every year, down payments can be the most difficult part of purchasing a home.  You can have a qualified applicant in every way, but without a down payment it may feel like home ownership is just a dream.  I’m here to tell you that isn’t true.

Down Payment assistance is for first time home buyers only: MYTH

Down payment assistance is not limited to first time home buyers.  First let’s define what a “first time home buyer” is.  By lenders definition a first time home buyer is someone who has NOT owned a home in the last 3 years.  So if you previously owned a home, but have not for the last 3 years; you are considered a first time home buyer again.

In the event you have owned a home in the last 3 years, there are still down payment assistance programs available to you.  Loans like WHEDA are a common alternative and have no 3 year limitations.  For more information about WHEDA loans please click here.

 

Down payment assistance is difficult to get: MYTH

Sometimes people get discouraged because they feel assistance is out of their grasp, often times this is a result of not being educated.  Yes some programs will be unavailable to you because your income is to high or the location of the home.  But there are so many different programs available that over 38% of first time and second time buyers were eligible but did not know it.

 

Down payment assistance programs make financing more difficult: MYTH

This is a common misconception because many people look at home assistance as a weakness in their file.  But on the contrary there are a growing number of lenders that are adopting these programs because it opens up new avenues of business for them.  The attitude towards down payment assistance has become very positive.

 

Down payment assistance guarantees longer closing timelines: MYTH

This is a false impression that many people get because they feel that down payment assistance will pro-long their closing date.  This is untrue because  down payment underwriting and regular underwriting coincide to close on the exact same day.  They are separate entities that work for the same goal.  Using assistance does not prolong underwriting and close dates.

 

The seller frowns at down payment assistance: MYTH

Sellers will not be aware that the buyer is using down payment assistance, technically the loan being used will have a down payment, but the source of the down payment isn’t listed on the sales contract.  So a seller shouldn’t know where the buyer is getting their down payment at all.

 

A large down payment is always better: MYTH

FALSE!  Did you know on most mortgages every $1,000 financed is only about $5.00 a month in payment?  So if you’re stressing about the lowest possible payment, don’t!  A few thousand more in down payment only equates to about $15 a month in your mortgage payment.  Down payment assistance doesn’t always work just for down payment, it can help with closing costs too.  That’s valuable money you can save on closing cost by using down payment assistance.

 

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Justin Scott

Loan Officer

NMLS 878581

  1. C) 920-530-4484
  2. O) 920-490-8823
  3. F) 920-490-8967

Executive Mortgage

NMLS 271650

909 . E Walnut Street

Green Bay WI 54301