So you want to begin a search for a new home. Great! You have everything ready when you realize that you have not saved enough money for a 10% or larger downpayment. What now? What are your options?
A few years ago there were options for everyone, including those with no money down. Unfortunately, these options have become more limited with the tightening of programs over the past 2 years. Today, most programs want buyers to put down at least 5%, with all of this being the borrowers own savings.
So, what are your options?
The best one still out there is FHA financing, which is available with as little as a 3.5% downpayment and is now used over 50% of the time. In cases where a buyer may have issues with coming up with that 3.5%, he or she can use a gift from a family member as the downpayment. What many home owners don’t realize is that, FHA financing allows the entire 3.5% to be a gift.