One of the biggest misconceptions of home buying? The 20% down payment. Here’s how to buy with a lot less down.
Buying your first home conjures up all kinds of warm and fuzzy emotions: pride, joy, contentment. But before you get to the good stuff, you’ve got to cobble together a down payment, a daunting sum if you follow the textbook advice to squirrel away 20% of a home’s cost.
Here are five creative ways to build your down-payment nest egg faster than you may have ever imagined.
1. Crowdsource Your Dream Home
You may have heard of people using sites like Kickstarter to fund creative projects like short films and concert tours. Well, who says you can’t crowdsource your first home? Forget the traditional registry, the fine china, and the 16-speed blender. Use sites like Feather the Nest and Hatch My House to raise your down payment. Hatch My House says it’s helped Americans raise more than $2 million for down payments.
2. Ask the Seller to Help (Really!)
When sellers want to a get a deal done quickly, they might be willing to assist buyers with the closing costs. Fewer closing costs = more money you can apply toward your deposit.
“They’re called seller concessions,” says Ray Rodriguez, regional mortgage sales manager for the New York metro area at TD Bank. Talk with your real estate agent. She might help you negotiate for something like 2% of the overall sales price in concessions to help with the closing costs.
There are limits on concessions depending on the type of mortgage you get. For FHA mortgages, the cap is 6% of the sale price. For Fannie Mae-guaranteed loans, the caps vary between 3% and 9%, depending on the ratio between how much you put down and the amount you finance. Individual banks have varying caps on concessions.
No matter where they net out, concessions must be part of the purchase contract.
3. Look into Government Options
The U.S. Department of Housing and Urban Development, or HUD, offers a number of homeownership programs, including assistance with down payment and closing costs. These are typically available for people who meet particular income or location requirements. HUD has a list of links by state that direct you to the appropriate page for information about your state.
HUD offers help based on profession as well. If you’re a law enforcement officer, firefighter, teacher, or EMT, you may be eligible under its Good Neighbor Next Door Sales Program for a 50% discount on a house’s HUD-appraised value in “revitalization areas.” Those areas are designated by Congress for homeownership opportunities. And if you qualify for an FHA-insured mortgage under this program, the down payment is only $100; you can even finance the closing costs.
For veterans, the VA will guarantee part of a home loan through commercial lenders. Often, there’s no down payment or private mortgage insurance required, and the program helps borrowers secure a competitive interest rate.
Some cities also offer homeownership help. “The city of Hartford has the HouseHartford Program that gives down payment assistance and closing cost assistance,” says Matthew Carbray, a certified financial planner with Ridgeline Financial Partners and Carbray Staunton Financial Planners in Avon, Conn. The program partners with lenders, real estate attorneys, and homebuyer counseling agencies and has helped 1,200 low-income families.
4. Check with Your Employer
Employer Assisted Housing (EAH) programs help connect low- to moderate-income workers with down payment assistance through their employer. In Pennsylvania, if you work for a participating EAH employer, you can apply for a loan of up to $8,000 for down payment and closing cost assistance. The loan is interest-free and borrowers have 10 years to pay it back.
Washington University in St. Louis offers forgivable loans to qualified employees who want to purchase housing in specific city neighborhoods. University employees receive the lesser of 5% of the purchase price or $6,000 toward down payment or closing costs.
Ask the human resources or benefits personnel at your employer if the company is part of an EAH program.
5. Take Advantage of Special Lender Programs
Finally, many lenders offer programs to help people buy a home with a small down payment. “I would say that the biggest misconception [of homebuying] is that you need 20% for the down payment of a house,” says Rodriguez. “There are a lot of programs out there that need a total of 3% or 3.5% down.”
FHA mortgages, for example, can require as little as 3.5%. But bear in mind that there are both upfront and monthly mortgage insurance payments. “The mortgage insurance could add another $300 to your monthly mortgage payment,” Rodriguez says.
Some lender programs go even further. TD Bank, for example, offers a 3% down payment with no mortgage insurance program, and other banks may have similar offerings. “Check with your regional bank,” Rodriguez says. “Maybe they have their own first-time buyer program.”
Not so daunting after all, is it? There’s actually a lot of help available to many first-time buyers who want to achieve their homeownership dreams. All you need to do is a little research — and start peeking at those home listings!
Back to school isn’t the most exciting thing happening in August. It pales in comparison to another, much more important event: the release of the new IKEA catalogue. Praise, Sweden, it’s here. And that means it’s time for us scour the book for all the things we’ll need to go buy in the coming weeks.
Here is our Top eight:
1. The utilitarian Pinnig has a coat rack up top and shoe storage down below, and will fit right in with industrial décor. Throw a cushion over that bench and you also have a comfy place to sit with this $89 piece.
2. We love the simple shape of the $75 ODGER chair, and the fact that it “assembles without tools and works for dining room, workspace, and more,” said Curbed, makes it even better. If you’re not a fan of the light brown, it will also come in creamy white and dark blue.
3. IKEA is down with the brass trend that’s going on in interior design, and we’re all about their new TILLAGD Flatware. Priced at $59.99 for a 20-piece set, it also comes in black. Apartment Therapy calls the sets an “on-trend bargain yet timeless enough to purchase for the long haul. Get ready for your glammiest dinner or holiday parties ever with flatware in simple shapes done up in luxe, of-the-moment finishes.”
apartmenttherapy.com4. In a kid’s room, a laundry room, a craft space, a dorm room, a kitchen – there isn’t a space we can’t picture using the MYRHEDEN Frame. At $14.99, it’s so affordable you can buy one for every room. With a clip in every part of the grid and hooks at the bottom, just imagine what you’ll be able to show off.
Ikea5. New hardware is among the easiest and most impactful changes you can make to a piece of furniture, and these OSTERNAS Leather Handles and Pulls ($12.99 for two handles, $9.99 for two pulls) will certainly make an impression.
Ikea7. Personally, we’re fans of anything that has a tray on top. This little $39 YPPERLIG Coffee Table is DEFINITELY going to keep the dog from knocking over the ever-present Diet Coke (again).
decoist.com8. If you’re OVER your quilted headboard, might we suggest the GJÖRA Bed Frame. The natural wood color is right on trend, and, at $279, it’s an inexpensive way to update your lair.
Here’s a fun article we wanted to share that was written by Amalie Drury and shared on Housecall. It’s too good to keep to ourselves!!
There’s something magical about watching a movie outdoors—the fresh air, the novelty of a big screen under the stars, the excitement of a group of people all laughing along to their favorite lines. And you don’t have to wait for your local park district to host a screening, either, when you create your own outdoor movie theater right in your backyard. Here’s what you’ll need.
Create a stadium-style effect by arranging a semi-circle of comfortable outdoor lounge chairs, sofas and chaises for adults. Then spread thick picnic blankets—or even sleeping bags—for kids on the grass closer to the screen. Scatter oversized pillows, poufs and extra light blankets within easy arm’s reach for everyone.
When your guests get up and down for snacks during the show, make sure to light their way with candles (real or battery-operated) in glass hurricanes, a strand of string lights overhead or even rope lighting along the ground similar to the aisle at an actual movie theater.
Snacks and Drinks
In a tucked-away spot away from the screen, set up your “concession stand.” Make it festive with a big popcorn popper complete with a buffet of toppings like melted butter, parmesan cheese, cajun spices and cinnamon sugar. For a fun touch, buy individual popcorn bags—you can find old-fashioned red-and-white bags or customizable brown paper bags online. Other easy food ideas include sophisticated meat-and-cheese boards for adults, homemade pizza cut into small squares, and bowls of miniature candy bars for all to enjoy (just avoid foods that are drippy or difficult to eat in the dark).
Beer and wine are the logical way to go for drinks—they’re easy to pour and can be sipped over the course of a couple of hours as the movie plays. Make them feel special with a bar cart setup complete with pretty ice buckets and attractive melamine glassware rather than disposable plastic.
There are lots of different options when it comes to the key components you’ll need to actually screen your movie: a projector, a screen, a sound system and a media player. If cost is no object and you foresee using these components time and again, there are amazing high-quality inflatable screens and high-pixel projectors on the market. But you’ll have just as much fun with a king-sized white bed sheet hung on the side of your house or garage, a low-cost (or rented) projector, your laptop computer and your best Bluetooth speaker cranked way up.
Just be sure to test your setup before movie night, checking to make sure your connections work and finding out how dark it needs to be outside before your movie shows up nice and bright on the screen.
Fun and Games
An idea we love? As dusk begins to fall, get your guests excited to watch the movie and draw them to their seats with “previews,” like clips from wildlife documentaries and classic cartoons. Consider raffling off a pair of tickets to a movie at a local theater, and plan something participatory for intermission—a trivia game or a toast with a special batched cocktail will help keep the mood festive.
Amalie Drury is an expert on home design and furniture trends, writing on behalf of Crate and Barrel. She has covered related topics as a senior editor for magazine publisher Modern Luxury and as a city editor for women’s lifestyle site PureWow. She has also written for Time Out, the Chicago Tribune and Sophisticated Living.
The average homeowner is spending more money on a greater number of home improvement projects, according to HomeAdvisor’s 2017 True Cost Survey, a study of 14 million service requests received between July 2016–17. However, the projects vary by generation, income, and geography, the study finds. Here are the top five most popular home improvement projects by generation.
- Install outdoor play equipment
- Install childproofing
- Install backyard landscaping
- Update sprinkler system for lawn and garden
- Install front yard landscaping
- Repair outdoor play equipment
- Install outdoor play equipment
- Add or remove holiday lighting
- Build or install vinyl-lined swimming pool
- Build or install an above-ground swimming pool
These homeowners are the biggest spenders on remodeling projects, according to the study. They pay a lot for home maintenance to keep their property values up—particularly if they’re looking to sell and use the proceeds in retirement.
- Install or repair gutters
- Repair shed, barn, or playhouse
- Repair gazebo or freestanding porch
- Asphalt sealing
- Repair exterior trim
“Boomers are indulging in luxury purchases, large discretionary remodels, kitchens, bathrooms, stonework, remodeling swimming pools, hiring designers to do professional landscaping jobs,” says Brad Hunter, HomeAdvisor’s chief economist.
Source: “Home Improvement Is Hot Right Now, But Who’s Doing What?” realtor.com® (Aug. 28, 2017)
Welcome to your new home at 972 Welch Avenue in historic Berthoud, Colorado!
This property is impeccable with it’s sparkling clean interior and ready to move-in condition.
You’ll enjoy it’s recent upgrades to the bathrooms, including a fully finished “daylight” basement, upstairs loft area and private patio.
With designer touches everywhere, you can spread out in your separate dining room and breakfast bar. Kitchen features a wonderful pantry and the property has high ceilings, for a completely airy feel.
Some luxuries that you might not expect is a walk-in closet, central air conditioning and attached car garage.
We think the crown jewel is the extended front porch!
Low maintenance living at it’s best, not to mention the opportunity to live in historic downtown Berthoud!
When a homeowner decides to sell their house, they obviously want the best possible price for it with the least amount of hassles along the way. However, for the vast majority of sellers, the most important result is actually getting their homes sold.
In order to accomplish all three goals, a seller should realize the importance of using a real estate professional. We realize that technology has changed the purchaser’s behavior during the home buying process. According to the National Association of Realtors’ 2016 Profile of Home Buyers & Sellers, the first step that “…44% of recent buyers took in the home buying process was to look online at properties for sale.”
However, the report also revealed that 96% of buyers who used the internet when searching for homes purchased their homes through either a real estate agent/broker or from a builder or builder’s agent. Only 2% purchased their homes directly from a seller whom the buyer didn’t know.
Buyers search for a home online but then depend on an agent to find the home they will buy (50%), to negotiate the terms of the sale (47%) & price (36%), or to help understand the process (61%).
The plethora of information now available has resulted in an increase in the percentage of buyers who reach out to real estate professionals to “connect the dots.” This is obvious, as the percentage of overall buyers who have used agents to buy their homes has steadily increased from 69% in 2001.
What we’d like you to take away –
If you are thinking of selling your home, don’t underestimate the role a real estate professional can play in the process.
In today’s market, with home prices rising and a lack of inventory, some homeowners may consider trying to sell their homes on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers.
Here are the top five reasons:
1. Exposure to Prospective Buyers
Recent studies have shown that 94% of buyers search online for a home. That is in comparison to only 16% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?
2. Results Come from the Internet
Where did buyers find the homes they actually purchased?
- 51% on the internet
- 34% from a Real Estate Agent
- 8% from a yard sign
- 1% from newspapers
The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.
3. There Are Too Many People to Negotiate With
Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale by Owner:
- The buyer who wants the best deal possible
- The buyer’s agent who solely represents the best interest of the buyer
- The buyer’s attorney (in some parts of the country)
- The home inspection companies, which work for the buyer and will almost always find some problems with the house
- The appraiser if there is a question of value
4. FSBOing Has Become More And More Difficult
The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.
The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.
5. You Net More Money When Using an Agent
Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.
Studies have shown that the typical house sold by the homeowner sells for $185,000, while the typical house sold by an agent sells for $245,000. This doesn’t mean that an agent can get $60,000 more for your home, as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.
What does this mean to you?
Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.
Welcome to 176 Sand Cherry Street in Brighton, Colorado! A lovely 3 bedroom and 4 bath home in over 3500 square feet!
This home boasts fwo full size master bedrooms- one on main, one on the upper level- both w/large walk-in closets & luxurious 5-piece master en suites.
Each level has own laundry rooms!
Open & vaulted kitchen, dining, family room area. Granite counters, upgraded stainless appliance package, dbl ovens, large island, walk-in pantry.
Wood floors on entire main level.
Some features to mention are upgraded lighting & plumbing fixtures, doors & trim. The home has a high efficiency furnace, electronic air cleaner, water softener.
An added bonus is the custom deck with lighted hot tub. (MLS#827282, asking #399,900)