Who Can Help With Your Home Loan Down Payment?
Another revelation by the study? More than 40 percent of those asked stated that they fully expected down payment help from their parents when the time was right. Roughly 43% of Millennials and Generation Z respondents to the survey say they will need help with down payments.
The idea of planning for ten years or so to buy a home is actually a fairly sound one if you consider having to save up for the down payment, closing costs, moving expenses, new appliances where needed, etc. But never forget that you have options that can help free up money for your down payment.
It’s true that nobody with a financial stake in the outcome of the home loan transaction is allowed to give you money intended for a down payment.
But the seller of your home IS permitted to contribute a certain amount of money toward your closing costs, and you can use the money you would have paid in that area and switch it over to your down payment.
You can also search for a local organization in your area who may offer down payment assistance, home buyer grants, etc. Down payment grants are not standardized and you will have to apply using the procedures established by the agency.
Some may require a demonstration of financial need, others may have no restrictions at all except that the funds be used to help purchase a home.
So who is allowed to help you with your down payment? Anyone who is NOT party to your sale. Your parents, your employer, friends, other family members, etc. can all contribute down payment money but those funds MUST be properly sourced and documented.
It is best not to accept down payment funds from anyone until you have spoken to a loan officer about it to learn what the accepted procedures are for accepting and sourcing the money. Know these rules before you start for best results and remember that not all lenders have the same requirements or procedures--what worked at one bank may not work at another financial institution.
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FHA Loans Have Credit Requirements
Help Is Available With Down Payment Grants
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