Most people that are renting are faced with a quandary, should I buy or wait and save 5-10-20 percent to put down to purchase a house. If you are close to that goal by all means pursue that option. But if you are not, there is solution that may get you into a house quicker than you think.
In the industry refer to type of loan as “Bond Money”. There are two types of Bond Money Loans that you can apply for – See http://www.mhdc.com/homes/index.htm and download the brochure or ask you leader if you meet the requirements. They can also give you the latest rates.
The first one is called First Place Loan Program – for first time homebuyers. The second one is called Next Step. Next step is also for first time homebuyers as well as people who have not owned a home for a while. The difference is the will accept higher income levels and home prices.
To summarize these loans, think of them like a Pell Grant. If you meet the qualifications, we the taxpayers loan you the borrower 4% of the 3.5 % needed to put down for an FHA Loan. You only need to pay for the closing cost and prepaid items. However, if you ask the seller to pay for the closing cost and prepaid items, you can get the home with very little money down.
So what’s the catch??? You need to stay in your home for 5 years and the 4% loan is forgiven, you own nothing. If you move prior these is a penalty that you will need to pay. It is a FHA loan so there is PMI till you refinance it into a conventional loan. And the house must be able to pass an FHA home inspection. A realtor can go over some conditions that pop up consistently. I would be more than happy to explain all this face to face.
So if you don’t mind a slightly higher interest rate and you tired of paying the landlords mortgage for them, it is time to call a lender and get preapprove so we can get you into a home.
I work a lot with Megan Finn at Flat Branch Home Loans. Reach out to Megan and see if she can help you, as she has helped so many of my clients in the past.