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By W. Troy Swezey
For many renters, the first step in buying a home is becoming educated about
the process. If you’re like many people considering a home purchase, you’ve
spent nights and weekends poring over your local real estate section. You’ve
talked to friends and relatives about their experiences. Maybe you’ve even
purchased a book or tow to help you become more familiar with real estate
terminology and the various types of mortgages commonly used today.
Coming up with a down payment and finding a loan that meets your needs are the
greatest hurdles faced by first-time homebuyers. So, you may even have leafed
through stacks of brochures and flyers from lenders offering down payments
that are far less than the 20 percent you’d always thought you’d need to save
before you could buy. With so many excellent first-time buyer programs to
choose from these days, you practically need to be an expert to sort through
them all.
That’s why if you’re a first-time homebuyer seeking a low down payment loan,
you’ll save time by selecting a professional real estate agent who is
experienced in working with people just like you in the area where you plan
to buy. An agent who frequently assists first-time buyers will know from
experience which lenders in your area offer a low down payment program that
will most closely match your needs.
A professional real estate agent can help you determine whether you are likely
to qualify for these special programs, since participation in some may be
limited to buyers under a certain income level or for the purchase of homes
below a certain purchase price. Your agent also will be able to tell you
whether there are other requirements you must fulfill in order to be
considered. With some programs, for example, you must attend an educational
seminar before you can be considered for one of these low down payment loans.
It’s important that your agent become familiar with your current financial
situation. Before you meet with your agent to discuss your financial
situation and housing needs, you’ll want to collect some basic information to
make the process easier. Be prepared to show recent paycheck stubs or pay
vouchers to certify sources of income; a complete list of current credit
card, auto and other consumer credit payments you make each month; and recent
bank and savings statements. These documents will help you and your agent
determine how much home you can afford. It’s also important that you disclose
any prior credit problems or late payments. Your agent may be able to suggest
ways to remedy any negative remarks on your credit report that could
disqualify you from a low down payment loan program.
In addition, because most lenders will require that you have several months of
house payments in the bank as a reserve, your agent may be able to suggest
ways you can increase your savings in the weeks and months leading up to your
home purchase. Don’t forget that some programs allow you to apply a cash gift
from a family member to cover the required down payment and losing costs.
Your agent also may know a motivated seller who would be happy to assist you
in accomplishing your home purchase by caring a second mortgage. A second
mortgage is helpful because it reduces the amount of the first mortgage you
need to obtain. In some cases, a second monthly payment and generally is
required to protect the lender when a down payment is less than the standard
20 percent of the loan amount. Even if your seller isn’t willing to take a
second mortgage to complete the sale, he or she may be willing to pay your
closing costs, which will reduce the amount of cash you need to have on hand
up-front.
With interest rates edging up, innovative mortgage financing programs that
require a low down payment are even more important than ever to first-time
buyers. A professional real estate agent can help you sift through the
countless programs that are available and help find the one that’s mortgage
can eliminate the need for private mortgage insurance, which is added to your
right for you.
W. Troy Swezey is the author of “EASING YOUR WAY INTO HOMEOWNERSHIP: HOW YOUR
REAL ESTATE AGENT CAN HELP YOU QUALIFY FOR A LOW DOWN PAYMENT MORTGAGE." As a
Realtor at Century 21 Paul & Associates, he has helped many individuals with
their real estate needs. Visit his web site to download his free e-book,
“Real Estate Secrets Exposed.” http://www.TroyIsMyRealtor.com (http://www.
TroyIsMyRealtor.com) or mail to: TroyC21@usa.net (mailto:TroyC21@usa.
net)
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