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Ways to Save for a Down Payment on Your First Home in Lake Travis

by Rebecca Shahan

Buying your first home bring up all sorts of good feelings. But before you get there, you have to get through the daunting task of making sure you have enough for a down payment. You may have to come up with as much as 10% - 20% of the purchase price, which can be a large sum.

So now its time to get creative! Here's 3 creative ways you can put together the money you need faster than you may think.

Crowdsourcing

Crowdsourcing has become a popular way for people to raise money for projects. Popular crowdsourcing sites such as Kickstarter have been used to fund all sorts of projects. So why not crowdsource your first home?

If you're getting married, for example, you can skip the traditional registry and use sites such as Feather the Nest and Hatch My House to raise your down payment. According to Hatch My House, they've helped home buyers raise more than $2 million for down payments.

Ask the Seller to Help (Really!)

Seller concessions are where the seller will work with you to reduce closing costs. If the seller wants to close the deal quickly, they may work with you in this way. The fewer the closing costs, the more money you can put toward your down payment.

You real estate agent may be able to help you negotiate a deal, such as 2% of the overall sales price in concessions to help with the closing costs.

There are, however, limits on concessions depending on the type of mortgage. For FHA mortgages, the cap is 6% of the sale price. For Fannie Mae-guaranteed loans, the caps vary between 3% and 9%, depending on the ratio between how much you put down and the amount you finance. Individual banks have varying caps on concessions.

Government Options

You can also look into programs through the U.S. Department of Housing and Urban Development, or HUD, that help with down payments and closing costs. If you meet particular income requirements, you may qualify.

Your profession may also determine what programs are available through HUD. The Good Neighbor Next Door Sales Program can help those who are law enforcement officers, firefighters, teachers, or EMTs.

If you're a veteran, the VA will guarantee part of a home loan through commercial lenders. In many cases, you don't need a down payment or private mortgage insurance, and it will help you secure a  competitive interest rate.

Check back on our blog twice a week for more real estate news, ideas, and local events in Austin and Lake Travis. You can search for the perfect home on our website using our powerful home search tools. You can also get free listing alerts of homes as they hit the market at WelcomeToLakeTravis.com. And you can always feel free to call us at 512-657-4467​ to talk to an experienced agent today.

Check Out This Creative Way to Save For a Down Payment

by Rebecca Shahan

Many first time buyers struggle with saving enough for a down payment. But one creative way to save that money is gaining traction - crowd sourcing. It's a great way to let friends and relatives help you buy your first home.

Here's how it works. When a young couple gets married, they ask their wedding guests to contribute to their “Down Payment Fund" instead of buying them traditional gifts.  Many new couples already live together and have what they need to furnish a home. So now they just need the home.

Think about it.  Most weddings average about 120 guests in attendance who buy a gift. If the average gift is $186, the newlywed couple would now have over $22,000 to use for a down payment! Of course this is just an example.  The figures could vary greatly.  But it would still go long way to help with a down payment. Plus the givers know that the money is going toward a worthy cause.

And as you've probably already guessed, there are services set up right now to facilitate this new trend, such as HomeFundMe. These services will allow anyone in the fundraiser's circle to contribute. The ones contributing can even decide if the gift will be ‘conditional’ or ‘non-conditional’ on the beneficiary buying a home.

A recent Wall Street Journal article reports, “about 400 borrowers have used HomeFundMe to help buy homes since the program launched in October and on average, they raise about $2,500.” According to the article, these funds are used by the borrower along with their own savings to help them reach the down payment.

In addition, more programs are available to first-time buyers that lets people put down as little as 3%, such as with Fannie Mae and Freddie Mac loan programs. Also, FHA programs require as little as 3.5%, and VA Loans are often approved with 0% down!

The days of paying 20% down for a new home are a thing of the past. So it's time to get creative if you need help saving for your down payment.

Check back on our blog twice a week for more real estate news, ideas, and local events in Austin and Lake Travis. You can search for the perfect home on our website using our powerful home search tools. You can also get free listing alerts of homes as they hit the market at WelcomeToLakeTravis.com. And you can always feel free to call us at 512-657-4467​ to talk to an experienced agent today.  

Displaying blog entries 1-2 of 2