The Basics of Down Payment Assistance
Down payment assistance is part of your down payment is usually funded at the state or local level by a nonprofit charitable organization or even a public entity, such your labor union or employer. There are also programs provided by lenders!
A grant-type of down payment assistance, such as those from a nonprofit, must meet two requirements for it to be considered assistance and not a gift. First, it must be available through an application process and second, the grant must be available to the general public. In other words, the grant cannot be created just for you.
Down Payment Assistance from Sellers
Before the laws changed in 2008, sellers could contribute to the buyer’s down payment through a “middleman” service that kept an account for the buyer. Although this option is no longer available, there are ways that the seller can still help you with the down payment.
The trick is to negotiate for other items as part of the home buying transaction. For example, you can ask the seller to assist with the title insurance. You can also ask the seller to help pay for points to lower your interest rate or to contribute to your property taxes.Keep in mind that there is a limit as to how much the seller can contribute. The limits are based on the type of home loan you’re using.
5 Home buying myths
There are a lot of myths about buying a home that are easy to bust.
Here are a few of the big ones:
I need a 20% down payment.
FALSE! This goes back to the days when lenders had far fewer options. Now, you can get a mortgage for as little as 1% down and still have a low monthly payment. The better your credit; the more options you have. Get your score as high as you can BEFORE you apply.
I have to dig up a lot of paperwork.
FALSE! A lot goes into qualifying you for a mortgage, but these days much of the verification process — like collecting pay stubs, bank statements and tax information — can be done automatically by your mortgage lender. Realistically, once you are ready to buy your lender can take it from there.
It will take a lot of time.
FALSE! A good mortgage lender can take your application and give you a pre-approval letter in moments. Many even let you do it yourself online. This way the time is in your hands. Time is on your side.
My bank is the best place to get a mortgage.
FALSE! Banks don’t offer many mortgage choices. An independent mortgage broker in your local community can help you find the best options and the lowest rates.
I need to be “settled down” first.
FALSE! When you buy a home, you’re paying yourself, not your landlord. Don’t keep waiting based on temporary situations, make the sacrifice to prepare for the purchase. Save your income tax, overtime, and extra income. Even with down payment assistance there are some fees you will still need to pay out of pocket such as your earnest money, option fee, appraisal, survey, and even home inspection.
Determining Your FICO Score-Credit scores are calculated using the credit bureaus TransUnion, Experian, and Equifax along with these Five categories, including:
Payment History—Payment history is often used to gauge the likelihood a borrower defaulting on their loan.
Length of Credit History—A long and significant credit history also helps to improve your FICO score.
New Credit—The amount of newly opened credit and the type of account opened is another factor your FICO score.
Type of Credit in Use—Consider the different types of accounts you have.
Ideas to Raise Your FICO Score
The good news is that no matter where your FICO score is right now, it can change! Here are our top insider tips to get a raise your credit score:
Keep Credit Balances Low-Using too much of your open credit can lower your FICO score. Attempt to keep your balances below 20-30%& pay your credit card bills on time!
Keep Credit Revolving-Though it seems like the right thing to do, you don’t want to close your unused account. A simple way to keep it active is to make purchases, like gas or coffee.
Review Credit Score Thoroughly-Review the factors of your FICO report completely. Make sure all the information is correct and notify the credit bureau if you found any errors.
We are new and improved and feeling good from our head to our shoes!!! Long time no talk. You know the old saying, “those who are walking don’t have time to talk to those who are talking?” Well, that’s me for the past four months. It has literally been a blur. So, what’s new with IISPIRE? We are still Individually Inspiring Specific People In Reaching Each… Dream, Vision, or Goal, however we are taking it to the next level.
Inspiring You To Greatness, Inc. has always offered education that’s why we started this non-profit. Now, with Texas Affordable Housing and our relationship with private donors we are now able to offer some rental assistance. You must be volunteering with IYTG to qualify. The fund is not large enough to offer to the general public right away. The Texas Affordable Housing Program is for temporary assistance in emergency situations only.
Inspiring You To Greatness, Inc. is launching the B3 Program. Better Business Banking means banking the way you need to bank not based on the banks needs. IYTG has some amazing new partnerships collaborating as we speak to offer more education, lunch and learn workshops, and events to the community specifically Business Owners and Entrepreneurs along with their employees, partners, vendors, and friends. Who doesn’t want free lunch?
Please visit the http://iispire.com/blog/b3program/ page and register for the upcoming session.
BUYING VS. RENTING
This may surprise you, but a monthly mortgage payment is often less than what you might pay for rent. In fact, with just 1% down, you could save more than $600/month on a $250,000 home purchase and avoid monthly mortgage insurance.
PURCHASE A $250,0000 HOME
BUY: $1,597.85* (30-YEAR FIXED) RENT: $2,200 MONTHLY
*With the 1% Down program, the borrower puts down 1%, the lender contributes 2%, giving the borrower 3% equity at closing. The principal and interest payment on a $242,500 30-year Fixed-Rate Loan at 4.625% and 97% loan-to-value (LTV) is $1,285.35 with -1.153 points due at closing. The Annual Percentage Rate (APR) is 4.624%. The principal and interest payment does not include taxes and insurance premiums, which will result in a higher actual monthly payment. Taxes and insurance are estimated and will vary with each loan. *Includes estimated taxes and insurance. Pricing calculated on March 31, 2017.