A Classic Real Estate Love Story:
John and Marie fell in love with the little white picket fenced home built in 1929! They could see themselves sipping coffee on the front porch on Sunday mornings, saying hello to the neighbors as they walked by! Sadly, it was just out of reach for them because they didn’t have enough savings for a 20% down payment and if they came in with less than that, the costly mortgage insurance would decrease their buying power and they wouldn’t qualify for this home at this price.
In the past, that would have been the end of the discussion. Today, there are several options to overcome this obstacle and allow them to buy their dream home!
We are seeing a trend that started a year or two ago in Carpinteria and is now offered through a variety of programs. It is a fantastic way for people wanting to buy homes that have a decent income, yet just don’t have enough of a down payment to make it happen. It can also allow some to buy a little bit nicer home, yet still keep their payments at an affordable level.
What is this AMAZING trend?
This trend is down payment assistance, and it has developed into several options offered by different lenders. In some cases, the down payment assistance is a loan that you make payments on in addition to your regular payment. In other cases, it is an equity share – which means you don’t make payments on it, however when you sell the home, the amount is paid back and a percentage of the increase in value is given to the lender.
Some programs require as little as 5% down from the buyer, while other require 10% – however half of that may be a gift from a family member. And the assistance can be up to $500,000!
What are the benefits of these programs? For some, it allows the buyer to make home ownership a reality. In other cases, it allows some buyers to get that additional bedroom that they really need or the view they have always wanted.
There are various repayment programs for these loans as well. Some require payment after 10 years, which means you would have to refinance to pay off that loan. Others allow you to “buy them out” after 3 years, although you could sell at any time if you needed to. Others can go all the way through the standard 30 year loan cycle.
Let’s Start the Discussion!
With various programs and options, determining which is the best for you and what is actually in your reach can seem overwhelming… But you are not alone! We know several great lenders in the area – and you do need to use someone local to take advantage of these programs – so if you think this may be a good option for you, give us a call or text at 805-698-0351 and we’ll get you a list of participating lenders!
You deserve to be positively in love with your house, let’s make it happen!
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