Updated: Apr 30, 2020
When it comes to financing a home purchase, you have options. Here are a few you might not know.
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Mortgage prices are really good right now. Even though home prices are pretty high in some areas, rates are so competitive that you might get a lower payment now than you would have five years ago in the same neighborhood where prices have risen. This is due to the fact that interest rates have come down so much.
When it comes to down payments, many people want to buy but don’t think they can afford it. We always ask those people if they’ve spoken to a lender; though there’s a lot of great information on the internet, nothing beats speaking with a professional. Your county, city, or municipality may have credits, down payment assistance programs, or income qualified assistance programs available. You’ll never know unless you ask.
For example, some people think that they can’t buy with a 10% down payment because they heard they need a minimum of 20% down. A 20% down payment is preferable, but you could definitely buy a home with 10% down.
Though there’s a lot of great information on the internet, nothing beats speaking with a professional.
For those out there who are concerned about being able to buy a home or who don’t want to do a double-move, there are two things that can really work to your advantage:
1. Bridge loan. This is where a lender lends you the money to buy a new property based on how much equity you have in your current home. That means, once you sell your current property, you’ll be able to use that equity to put a big down payment on your new home.
2. Recasting your loan. Suppose you’re able to buy a new property, but you want the equity you have in your current property to be transferred into the new one. By recasting your loan, you can buy the new property with a low down payment and, as soon as your current home sells, you can take all that money and put it back into your loan. This lets you adjust your mortgage payment as though you’d only purchased the new home with that down payment amount.
Just remember that you always have options. If you need some quality recommendations for a lender you can speak with, don’t hesitate to reach out to us. We’d be happy to connect you.