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6 Creative Ways to Afford a Home
If your income
and savings are making homebuying a challenge, consider these
options.
1.
Investigate local, state, and national downpayment assistance
programs. These programs give loans or grants to cover all or part
of your required downpayment. National programs include the Nehemiah
program (http://www.getdownpayment.com) and the American Dream
Downpayment Fund from the U.S. Department of Housing and Urban
Development (http://www.hud.gov).
2.
Get the seller to provide financing. In some cases, sellers
may be willing to finance all or part of the purchase price of the
home and let you repay them gradually, just as you do a mortgage.
3.
Consider a shared-appreciation, or shared equity,
arrangement. Under this arrangement, your family, friends, or even a
third-party may buy a portion of the home and thus share in any
appreciation when the home is sold. The owner/occupant usually pays
the mortgage, property taxes, and all maintenance costs, but all
investors’ names are usually on the mortgage. There are companies
that can help you find such an investor if your family can’t
participate.
4.
Get help from your family. Perhaps a family member will loan
you money for the downpayment and/or act as a cosigner for the
mortgage. Lenders often like to have a cosigner if you have little
credit history
5.
Lease with the option to buy. Renting the home for a year or
more will give you the chance to save more toward your downpayment.
And in many cases, owners will apply some of the rental amount
toward the purchase price. You usually have to pay a small,
nonrefundable option fee to the owner.
6.
See if you can qualify for a short-term second mortgage to
give you the money to make a higher downpayment. This may be
possible if you have a good income and little other debt
Reprinted from REALTOR Magazine Online by
permission of the National Association of Realtors
Copyright 2005 All Rights Reserved
www.REALTOR.org/realtormag
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