If you’re considering buying a home, you’re probably doing lots of research right now. You’re not alone. Most homebuyers do online research before engaging a Realtor or a lender. And if you are researching these areas, you’re probably looking for more insight about the down payment for your home.
While home prices are increasing, the good news is that down payment assistance programs can help make buying a home more affordable, and Indiana offers a number of programs to help you buy a home.
In this blog, we’ll break down five of the most common myths about home financing and down payment programs, provided in a booklet with the same title as this article, which you can access at downpaymentresource.com. Next week, we’ll look at the final five.
Myth # 1: Down payment assistance programs are only for first-time buyers.
Not true. “First of all, the majority of programs use HUD’s definition of a first-time homebuyer: that is, someone who has not owned a home in three years,” according to the booklet. If you’re someone who’s previously owned a home, but are currently renting, you may indeed be eligible. In addition, not all programs require you to be a first-time homeowner. In fact, some 38 percent of Down Payment Assistance programs have no first-time homeowner requirement at all, the booklet states.
Myth # 2: It’s difficult to qualify for homebuyer programs.
Not true. There are many options and opportunities. Homebuyers and properties do have to meet certain criteria, which may include property location, type of home, sales price, household income and credit score. In addition, there are individual programs for teachers, fire fighters, EMTs, police officers, healthcare workers, veterans, and households with disabled members, the booklet tells us.
Myth # 3: Assistance programs are no longer funded.
Not true. More than 87% of all programs tracked by downpaymentresource.com have funds available for homebuyers. “In fact, there are hundreds of millions of dollars in down payment assistance grants, tax credits, and affordable first mortgages available throughout the country,” including right here in Indiana.
Myth #4: Down payment assistance programs make home financing more difficult.
Not so. “When you apply for and use a down payment program, it does require additional paperwork; however, the paperwork is similar to what you are already doing when applying for a regular home loan,” the booklet continues.
It suggests you interview lenders to find someone knowledgeable about the programs in your area and willing to work with you. “These lenders understand how to incorporate this special financing into the home loan without complicating or prolonging the real estate transaction,” it states.
Myth # 5: Down payment assistance is only for very low-cost homes.
Again, no. “Don’t let preconceived ideas about these programs throw you off. Down payment assistance programs aren’t just for narrowly defined homebuyers and ‘targeted’ neighborhoods of very inexpensive homes. In fact, homes in any neighborhood may be eligible with sales price limits typically ranging from $200,000 to more than $700,000 in high-cost markets,” the article reports.
So far, so good, right? Next week, we’ll look at the final five myths about down payment assistance programs. Until then…