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Consumer
Reports for Home Buyers -
Buyers
Services |
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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.
-
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
Department of Housing and Urban Development.
http://www.hud.gov/news/release.cfm?content=pr02-014.cfm
-
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 with a mortgage.
-
Consider
a shared-appreciation, or shared equity,
arrangement. Under this arrangement, your family,
friends, or even an 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 maintenance costs, but
all the investors' names are usually on the
mortgage. There are companies that can help you find
such an investor if your family can’t participate.
-
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.
-
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.
-
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.
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