There are a lot of people who would want to purchase a home in the United States. However, there are bumps and challenges that need to be addressed, if they would want to purchase a home that they truly want.
One of the major factors that these potential homebuyers encounter is the requirement for giving a 20% down payment. But what if they do not have that kind of cash available? The good news is, there are already different alternatives that make the purchase of a home possible without a 20% deposit.
A potential homebuyer would need $60,526 for a 20% deposit for a $302,632 four-bedroom and two bath home. The Coldwell Banker Real Estate says that this is based on the national average listing price. With the increasing prices of real estate, the deposit is already quite a huge sum. RealtyBizNews also adds that it possible to buy a home without having to give a 20% deposit. If one is a current or former member of the Department of Veteran Affairs, they can avail of a housing loan with no deposit at all. If one is located in a rural or less populated area, they can avail a loan from the Department of Agriculture. If one resides in a city area, they can avail of assistance programs which are specifically drawn up to aid people who would want to purchase a home. Another option is thru the Federal Housing Administration which only requires a 3.5% deposit. Not to mention that the first year payments are lower compared to the start of 2015. However, this would mean more paperwork, a higher monthly payment, and paying a mortgage insurance just to name a few. The requirement for a good credit standing is a must though.
Credit.com adds that a there is a loan limit of $417,000 for a FHA loan. But there are other areas that are higher such as Sonoma County, Calif. with a maximum of $520,950. San Francisco County has a upper limit of $625,500. The report also shows what a potential homebuyer should do in order to buy without a 20% down payment. The income ceiling should be high enough to cover all existing debts as well as the proposed mortgage payment of the desired home purchase price. It is vital to know the percentage of the down payment in order to manage ones financial responsibilities. Setting an exact figure on how much one can afford in purchasing a home and foreseeing the financial changes in the future is also very important. Other optional funds for purchasing a home can be through stocks, bonds, IRA, 401(k) monies, a documented gift money option with an executed gift letter, selling personal properties, a security deposit and tax refunds.
If one is still planning to purchase a home without a deposit in the future they must be able to identify the monies in ones bank account and identify the sources. They should also identify the fair share market value of housing in the area via a real estate agent or searching online. Finally, being able to determine if there is enough cash available in their bank account to be able to roll with is also crucial. These are the steps that one must take in order to find out whether or not they can be able to successfully purchase a home on a long term basis.
