Down Payment

If you are planning on purchasing a home in the near future, you need to make sure you have enough money saved up. While there are a lot of expenses that go along with purchasing a home, the biggest expense is the down payment.

The common belief is that people have to put 20 percent down; however, even if you don’t have 20 percent saved up, you might still be able to purchase a home. It will depend on whether you can get a lender to provide a loan that is greater than 80 percent of the purchase price of a home. If you have a strong credit history, you may be able to get one.

Getting A Loan With Less Than 20 Percent Down

First, many lenders realize that many people do not have enough money saved up to put down 20 percent. After all, this could be tens of thousands of dollars.  Although some people might be able to get a loan with only 10 percent down, those with outstanding credit might even qualify for a larger loan. There are certain people, such as veterans, who might have other options outside of conventional loans that might open other doors. If you are looking to get a home loan for less than 20 percent down, you will want to check all of your options.

How To Get A Loan For Less Than 20 Percent Down

Particularly if you are a first-time homebuyer, you might not know how to get a loan for less than 20 percent down. First, you need to have a strong credit score. If the lender is giving you a larger loan, they will want to make sure you can pay it back. Having a strong credit score can prove this to them. You may want to check your credit report ahead of time to correct any inaccuracies.

Second, you need to take a look at your debt to income ratio. If you have a lot of debt, consider paying this down before applying for a home loan.

Finally, trust an experienced lender to guide you through the process. You might be able to get a home loan for less than 20 percent down.

For those who are looking to buy a home, they know that this is one of the most exciting experiences in the world. There is something special that comes with looking at a bunch of homes and envisioning a life there. On the other hand, the prospect of saving 20 percent of the home’s value to put down might seem overwhelming. Fortunately, there are a few creative ways that people can save up enough money to purchase their starter dream home.

Talk To The Seller

One of the first tips that people need to keep in mind involves talking to the seller. There are a bunch of items that need to be negotiated between the buyer and the seller. One of the most important is the closing costs. Ask the real estate agent to speak with the seller. Even if the seller is able to take half of the closing costs, this could amount to a few thousand extra dollars that could be put toward the down payment.

Crowdsource The Down Payment

Another creative option involves asking the crowd to help with the down payment. It is not unusual to see people try to go the crowdfunding route for everything from medical bills to student loans. Why not give it a shot with a down payment as well? First, anyone who has a wedding coming up should add “money for a down payment” to their wish list, as this is becoming more common. Second, think about exploring platforms like Feather the Nest to try to raise money for a down payment.

Check With The Employer

Finally, it is also critical to look at your Employer Assisted Housing Program(EAH). While not everyone is going to qualify, those who work for an employer who falls under this category might qualify for a substantial loan for the down payment and closing costs. The best part is that this loan comes without interest. 

Save For A Down Payment

These are a few of the top ways to save money for a down payment. Using these tips, everyone can get over that last hurdle and buy their home.