Many Americans want to own a home but may have challenges securing enough funds for a good down payment. You must put aside a lot of money to come up with enough funds, especially in expensive and popular housing markets. Usually, mortgage rates improve the more down payment you offer for a home. You must provide at least enough to meet the minimum requirements of the program. If you cannot save enough, but you are serious about buying a home, you can look up ways to help support your down payment costs. John Inghram at American Financial Network specializes down payment assistance programs work at our offices in Manalapan, NJ.
Navigating Down Payment Assistance Programs
There are a diverse array of Down Payment Assistance Programs available based on the background, income, or location of the potential eligible applicants. You can research with the New Jersey government or our offices to look up Down Payment Assistance Programs (DPAPs) in the area. Many of these programs are offered through nonprofit or government agencies in partnership with various financial institutions. Be sure you investigate the specific rules of the program.
Using a Grant for a Down Payment
Some DPAPs will be a non-repayable or repayable grant that is like a no-interest loan. Using a grant can be a great idea, but there are restrictions. For example, some grants will only be made for certain types of homes, uses, or geographies. Many contracts come with requirements to live in the home for a certain number of years and restrict the profits you can make if you resell the home. John Inghram at American Financial Network can help you review various down grants and see what requirements they have at our Manalapan, NJ offices.
Using Tax Credits with Down Payment Assistance
Another type of DPAP we’ve worked with can earn you tax credits, but it may not come with immediate funds to pay a down payment. Rather, the funder will offer to reduce the taxes you pay so that you can save more money to support down payment or closing costs for the home. There may be limits with this program as well. In many cases, the tax credit is limited only to first time homeowners.
Using a Mortgage for Down Payment Assistance
One of the most frequently used DPAPs is offered as a loan that can come with many benefits. Many times, the loan is made as a second mortgage with great terms. In this scenario, your first mortgage funds the cost to purchase the entire home, while the second mortgage funds the down payment and/or closing costs. Many governmental and nonprofit agencies offer this mortgage with zero or low-cost interest rates. You can also get a fixed-rate for this mortgage, so that you have a predictable form of funding.
Contact John Inghram at American Financial Network in Manalapan, NJ to learn more about Down Payment Assistance Programs (DPAPs) in the area. Our friendly staff will help you understand eligibility.