Down payment funding alternatives
For many buyers, especially first-time buyers, saving up the funds for the down payment can be a seemingly insurmountable hurdle to home ownership. This doesn’t have to be the case. As your mortgage broker, Castle Funding can help you find creative ways to come up with your down payment.
Zero down mortgage loans
Many people are not aware that a down payment isn't always needed for their home purchase. There are many lenders who offer 100% financing of the home purchase price. Lenders are very aggressively pursuing this option in order to qualify more buyers. 100% loans are available with credit scores as low as 580. A popular option attached to these loans is the interest-only payment option. The borrower is afforded the maximum leverage by keeping funds on hand instead of using them as a down payment, plus the payment on the loan is lower because only the interest due monthly is payable on the loan. Let Castle Funding help you find the down payment and mortgage alternative that’s right for you.
Using a gift for your down payment
One way to fund a down payment is by using a gift. For many loan programs, a gift may be used for a portion or all of the required down payment. Money given as a gift for a down payment can’t come from anyone. Family members are the usual source. And sometimes an employer may also be acceptable. If this is an option open to you, please let me know. I can help you determine which loan programs accept gift funds for down payments and who may give the gift.
Seller carry-back loans
Some sellers may be willing to “carry back” mortgage financing for their buyer. This means that, instead of reaping all of the proceeds in cash at the close of escrow, they agree to leave some of it as equity in the home. You sign a note and trust deed securing their loan, just as you would with a conventional lender, which gives them interest on their investment and makes it a win-win situation. Then the lender of the conventional, First Trust Deed is able to make a lower, more conservative loan, which will carry a lower interest rate.
