Down Payment Assistance for Home Buyers
Saving for a down payment is often the biggest hurdle for home buyers, but it doesn't have to be!
Almost half of all home buyers are unfamiliar with down payment assistance programs for first-time home buyers, teachers and school employees, firefighters, law enforcement, doctors, nurses and military personnel (active, reserve or veterans).
Whether you have just started to save for a down payment, or have been saving for years, you may be closer to your dream home than you think!
The term first-time buyer can be confusing and you may think that if you owned a home before you are no longer considered a first-time buyer.
Note that many if not most down payment assistance programs will allow a home buyer who previously owned a home and sold it to be defined as first-time buyer.
How About Closing Costs?
Your closing costs are determined by a variety of factors, but you can expect it to be between 2% to 5% of the purchase price.
Tip: Ask the seller to cover some or all of the closing costs upfront or request a closing credit that can be used to make specific updates and fixes to the home.
One More Time… You Do Not Need 20% Down to Buy a Home in California
The largest obstacle renters face when planning to buy a Southern California home is saving for a down payment. This challenge is amplified by rising rents, which has eaten into the amount of money renters have leftover for savings each month after paying expenses.
In combination with higher rents, survey after survey has shown that non-homeowners (renters and those living rent-free with family or friends) believe they need to save upwards of 20% for their down payment!
According to the “Barriers to Accessing Homeownership” study commissioned in partnership between the Urban Institute, Down Payment Resource, and Freddie Mac, 39% of non-homeowners and 30% of those who already own a home believe they need more than a 20% down payment.
The percentage of those who are aware of low down payment programs (those under 5%) is surprisingly low at 12% for non-homeowners and 13% for homeowners.
In a recent Convergys Analytics report, they found that 49% of renters believe they need at least a 20% down payment.
The median down payment on loans approved in 2018 was only 5%! Those waiting until they have over 20% may already have enough saved to buy now!
There are over 45 million millennials (33%) who are mortgage ready right now, meaning their income, debt, and credit scores would all allow them to qualify for a mortgage today!
If your future plan includes buying a home for sale in Cerritos or in a nearby city in Los Angeles or Orange County, let’s get together to determine what it will take to make that plan a reality. You may be closer to your dream than you realize!