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6
Creative Ways to Afford a Home
If your
income and savings are making home buying a challenge, consider
these options.
1.
Investigate local, state, and national down payment assistance
programs. These programs give loans or grants to cover all or
part of your required down payment. National programs include
the Nehemiah program (http://www.getdownpayment.com) and the
American Dream Down payment 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 down payment 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 down payment. 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 down payment. 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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