Don’t Let the Door Hit…

I still hear this every day. The same old cry from those who want first-time home buyer programs. These programs while real, they are mostly unrealistic and have proven to be nothing more than political bologna.

Let start with the basics and the best loan programs. FHA and USDA are the best first-time home buyer loan programs so to speak, unless you’re a Veteran, then it would be the VA loan program.

VA and USDA are loan programs with 100% financing available. The FHA loan has a minimum requirement of 3.5% down payment.

Please note that all three of these loans do not include closing costs. Closing costs on a home purchase with a mortgage loan can vary between $3000 to upwards of $14,000 and beyond. This will depend on the purchase price, loan amount, property taxes and insurance and many other title costs.

Please don’t think because you see a bad advertisement some place that you don’t need any money to buy a home. Yes, there are some other loan programs, grant programs and other things like bond programs that sound very appealing. However, most are garbage programs used for political propaganda.

For instance, there is a one bond program that offers out to first-time home buyers as down payment assistance with a limit of $7500. The catch is the cap on the debt to income ratio is very low and the minimum credit score requirement is much higher than the minimum requirements for the main loan program. This is also a second mortgage on the home and although the interest rate is low, the fees for the bond is incredibly insane.

The other problem with most bond programs is the loan originator does not get paid so why would any loan originator want to offer it out to the public. I don’t know anyone who goes to work in the morning knowing they are not getting paid for their efforts. If someone asked me I would just tell them to leave and don’t let the door hit them on the backside on the way out.

So, before you go shopping for a home know that if you don’t have any money saved for a small down payment and some closing cost, the chances of you getting into a home with empty pockets in your blue jeans are pretty, darn slim.

Get educated, ask questions, get your facts, get prepared properly and we will see you at a happy closing table.