Spend Less Than $10K to Purchase Your Next Home

The average price for a home in the United States these days is now $295,000. Most people know that a down payment for a home is traditionally around 20% of the purchase price. Well, if you’re good at math (and even if you aren’t) you know that 20% of $295,000 is definitely more than $10,000! (It’s actually, $59,000, considerably more than $10,000!)

So, where’s the catch? It’s truly more straightforward than you think and doesn’t involve living in a tiny home or buying a one room cottage! It’s simply a matter of working to cut down on your closing costs and down payment. There are countless programs available to help buyers with a down payment, ways to eliminate closing costs, and countless other methods to make this a possibility. Take a look at our favorite tips!

Types of Loans

A lot of money saving can be achieved by choosing the right kind of loan. Certain loans are available for a wide variety of situations. Many of these offer no down payment or a lowered down payment.

• USDA Loan- This loan is available in rural areas for those with low to moderate incomes and the loan can be secured for 100% of the purchase price. Fees associated with this sort of loan can be rolled into the monthly mortgage to eliminate the need for up front spending.

• FHA Loan- With an FHA loan, you can purchase a home for 3.5% of a home’s purchase price. This can dramatically lower the cost versus the traditional 20% down payment. It’s important to note that private mortgage insurance is required, but the costs for these can usually be bundled into the monthly mortgage payment as well.

• VA Loan- This is a loan that’s available to members of the military and their spouses. This loan will cover 100% of the purchase price and eliminates the need for a down payment. Fees and other insurance throughout the life of the loan are lower than other loans as well.

• Credit Unions- Local credit unions can sometimes be a great resource for a low or no down payment loan. Don’t forget to check with your local credit unions to explore all your options.

Closing Costs

Even with the ability to secure a loan without a down payment, closing costs are still a considerable fee to keep in mind. On average, those costs are around 7% of the home’s value. But don’t worry, there are ways to make them lower or eliminate them altogether.

• Closing Cost Assistance- There are tons of great programs for buyers. If you’re a first time buyer you might qualify for a program that could cover the entirety of your closing costs. This comes in the form of a grant and means that you will commit to living in your home for a certain number of years in many cases.

• Negotiate with the Seller- In some situations, sellers are anxious to move their home and are willing to cover closing costs. Many buyers negotiate to have the seller cover closing costs. This is a great way to eliminate these fees!