1. Save your tax refund for a down payment.
Accumulating enough money for a down payment is a challenge to many potential homebuyers. But 20% down is not always necessary. Your credit history, and other factors, may allow for only a 5% to 10% down payment.
Homebuyers may also be able to close the cash gap with down payment assistance programs. There are nearly 2,500 homeownership programs across the country that can help homebuyers save for a down payment and closing costs. Find out what programs are available in your area. Many county, city and state governments provide financial assistance for members of their communities who are qualified
2. Save for closing costs.
The typical homebuyer pays anywhere from 2% to 5% of a home’s purchase price in closing fees and fees can vary widely depending on where a homebuyer lives.
3. A lower interest rate.
A homebuyer may be able to buy down their mortgage interest rate by paying discount points. A point is typically 1% of the total mortgage loan amount. Think of it as an upfront interest payment to lock in a lower interest rate. For example, if a homebuyer wants to borrow $200,000, paying one discount point means paying $2,000 at closing. Paying discount points may end up saving you a lot in interest payments over the lifetime of a loan.
Not sure where to start? Find a Motto Mortgage office near you.
Published on September 27, 2019
