How to Buy Your Own Home Without Family Handouts
In the aftermath of the global recession, mortgages are not as easy to access as they once were, and getting a sufficient deposit together can represent a major challenge. In fact, more and more people are turning to family and friends to help them claw together the down payment required to buy their first property. However, not everyone is fortunate to be in the position to have family members with cash to spare. If you’re struggling to get on the property ladder due to lack of funds, fret not. There are some means by which you can buy yourself a home.
1. Nurture your credit score
To even contemplate getting a mortgage, you will need a strong credit score, and the better your credit score, the higher your chance of accessing low-down-payment mortgage plans or down payment assistance schemes (see below). Your credit score is not a measure of how much money you earn; it is a measure of how you manage that money. To maintain a strong credit score, keep an eye on your credit report on a frequent basis and ensure that you address any mistakes. Maintain low credit card balances and pay off invoices as soon as they are due.
2. Look for low-down-payment loans
In many cases, you will need to have a 20% down payment before you can secure a mortgage against a home. However, this is not always the case. Some buyers can access a conventional loan with a deposit as low as 3%, a VA or USDA loan with zero down payment, or an FHA loan with a down payment of 3.5%. Research what options are available and take advantage of any that are applicable to you. The best way to do this is to get in touch with lenders that specialize in low down payment mortgages and ascertain what their requirements are.
3. Take advantage of down payment assistance
Down payment assistance programs for first-time buyers are available throughout the United States. There is also some help available at the city and county level in some cases. These programs often provide first-time buyers with access to grants to buy homes. Alternatively, they may offer deferred-payment schemes or zero-interest forgivable loans. To qualify for these options, your income and credit score will need to be within certain thresholds. You may also be required to complete a homebuyer education class. To access a down payment assistance scheme, you should start by researching what options are available in your state. Check out the eligibility criteria for securing down payment assistance. If you need further assistance, consult a participating lender.