Home About Writers Categories Recent Issues Subscribe Contact File Transfer





Janie Carr
Janie Carr is a Plains Capital McAfee Mortgage home mortgage consultant, with offices at the corner of 13th and Ridge Road (7200 W. 13th, Suite 4). She has 21 years experience in the mortgage industry and is ranked among the top mortgage consultants in the Wichita area. Janie is an active member of the Wichita Area Association of Realtors and the Wichita Builders' Association. Janie is a member of the United Methodist Church. She and her family reside in Clearwater, where her children attend school. You may contact Janie at (316) 773-9500, or by e-mail at jcarr@mcafeemtg.com
Banking & Finance
2004-04-01 09:19:00
Home loan with no money down
Can I get a loan for a home if I have no money for a down payment?
ANSWER:  Many people who are making rent payments to a landlord think they cannot buy a home because they don't have any money for the down payment and closing costs. In today's world, there are several ways that someone with little or no money can buy a home.  One solution is to use a down-payment gift assistance program, or as it is sometimes called, a down-payment grant program. There are also conventional loan programs that allow the financing of 100% of the purchase price of your home. Your credit score will help determine what type of loan program will work for your particular situation. There are even programs that can help people with less than pristine credit scores become homeowners, and these usually result in a little bit higher interest rates for the borrowers. But the benefits of owning over renting far outweigh the penalties for a lower credit score. If you can afford to rent, you probably cannot afford not to look into owning.How Do Down-Payment Gift Assistance Programs Work? Home sellers can help buyers pay closing costs by giving a portion of their sales proceeds back to the buyer at closing. The amount of seller assistance that is allowed depends upon the type of loan the buyer is getting. Sellers cannot directly give home buyers money for their down-payment. That's where gift assistance programs step in, providing a way to "work around" those laws. 1. The seller enrolls their house in a suitable program and contributes an amount equal to the assistance their buyer will receive at closing--plus a fee. (Sometimes that fee is disclosed as 0.75% of the home's sales price.)2. When the transaction closes, the down-payment funds are wired from the gift assistance program to the closing agent. It's important to note that the seller has no part in the transfer of funds.Program guidelines may differ slightly, but they all offer similar basic services to the consumer.  Home buyers must qualify for a loan that allows gift funds. There are no minimum or maximum income requirements for buyers, but there may be top limits set on the sales price of homes. Typical assistance can usually range from 1% to 7%. Funds can be used for both the down-payment and the closing costs. Gift funds can be used for new or existing homes. Unused funds aren't kept, but must be returned to the gift program. Assistance programs cannot be used to refinance a house or to make home improvements. Only for the purchase of a home for the owner to occupy.Sellers cannot use the gift as a charitable contribution, but it may be deductible as a selling expense. Find out by consulting a tax preparation professional.Home sellers usually, not always, price their homes to include some negotiation space. What matters to a seller is his bottom-line--how much money he takes away from the closing table. A buyer who has the funds to close may get a better deal on the house, while a buyer who needs help will pay closer to (or even more than) the asking price, but in return can negotiate help from the seller. One thing you must keep in mind is the home's appraised value. The lender will not allow gift funds which result in a loan that exceeds the appraised value of the home. If you're working with a real estate agent, he or she can help you determine if the home is realistically priced and will help you evaluate where it should be priced. Your lender can help you choose a down-payment assistance program and explain how your offer to purchase should be worded to ensure compliance with your particular lender's underwriting guidelines. More to come...
 
The Q & A Times Journal accepts no responsibility for unsolicited manuscripts or photographs.Materials will not be returned unless accompanied by a stamped, self-addressed envelope. Thank you.
 
Wildcard SSL Certificates