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 dosen’t have to be the case. As your mortgage lender, I can help you find creative ways to come up with your down payment.

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 just 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.   I’ll also supply the gift letter that the person giving the gift is required to sign.  The gift letter states that the funds are a gift and will not be paid back. Additionally we need to see a copy of the check & deposit slip into your bank. 

FHA does allow gifts from friends in certain cases, the friend must been know for a long time and have a familiar type relationship with you. For instance maybe you have a friend who you have know since childhood and the two of you would eat and have sleepovers at each others homes, each attends family functions and is treated like a member of the family. 

Down payment assistance programs:

If a willing and able family member is not available, buyers may have the option of turning to the Maryland CDA program for down payment assistance for first time Maryland home buyers. Southern Trust Mortgage is a trusted and registered lender with the CDA. However, this program is not for everyone, there are income limits & home buyer education requirements associated with this program. Additionally the interest rates are generally right in line withother programs and often lower. this program can be a perfect fit for many people. Give me a call or send an email to find out more info.

Zero down mortgage loans

VA loan: Service persons and veterans can qualify for a VA Loan that requires no down payment.  VA Loans are guaranteed by the U.S. Department of Veterans Affairs.  In addition to no down payment, these loans usually offer a competitive fixed interest rate and limited closing costs.  While the VA does not issue the loans, it does issue a certificate of eligibility required to apply for a VA loan and offers a guarantee to the lending institution a portion of the loan against default.

USDA loan:

The USDA Rural Guarantee Loan as it's name implies is for homes based in geographic areas that the Department of Agriculture considers rural in nature based on census data. This loan requires no down payment. USDA loans are guaranteed by the U.S. Department of Agriculture. In addition to no down payment, these loans usually offer a competitive fixed interest rate and may allow some closing costs to be financed into the loan. While the USDA does not issue the loans, it does guarantee to the lending institution a portion of the loan against default.  

Seller Assistance with Closing Costs: