Farmington Hills MI First-time Homebuyers: The Down Payment

Farmington Hills MI First-time Homebuyers: The Down Payment

Farmington Hills MI First-time Homebuyers: The Down Payment

As a first-time homebuyer, socking away money for a down payment to purchase a home in Farmington Hills MI may seem like an overwhelming task. The down payment is the upfront cash you pay to qualify for a home loan, which is expressed as a percentage of the home price. 

Many potential homeowners think that 20% down is the only option when it comes to getting a mortgage, but, that is just a common misconception, as there are many options out there.  

Lenders often look at the down payment amount as your investment in the home. Not only will it affect how much you will need to borrow, but it can influence whether your lender will require you to pay for private mortgage insurance (PMI).

Mortgage insurance protects the lender in case the borrower defaults on the home loan, and typically, you will need PMI if you put down less than 20% of the home’s purchase price. 

Different loans require different down payment percentages

Down payment requirements can also vary by lender and your credit history. The minimum down payment for an FHA loan is just 3.5% with a credit score of 580 or higher, for example, but the minimum is 10% with a credit score of 500 to 579.

State and local down payment assistance

Exploring local and national first-time homebuyer assistance programs is an important step in the journey to homeownership. Down payment assistance is often combined with favorable mortgage interest rates or tax breaks.

Many state housing authorities combine closing cost and down payment assistance programs with mortgages that have favorable interest rates. Some states even offer tax credits you can use on your federal tax return.

These first-time homebuyer assistance programs can boost your chance of homeownership in particular geographic areas, or help borrowers in certain professions, such as educators, first responders, or active-duty military and veterans. 

It’s important to note that programs will usually set a maximum sale price and some have income limits, so not all home buyers will qualify. Still, it’s worth checking out programs in your state.

Down payment gifts from family members

It’s not uncommon for first-time homebuyers to get help from family members. Using a gift to supplement savings can help first-time homebuyers clear the down payment threshold.

According to a 2019 Generational Trends report from the National Association of Realtors, of all homebuyers ages 28 and younger, 28% used a gift from a relative or friend to make a down payment. And of all buyers ages 29 to 38, 21% used a gift.

Down payment gifts are acceptable to lenders, but applying a gift toward a down payment involves more than depositing a check. The donors will have to verify in writing that they made the gift and have the financial ability to make such a donation.

They will be required to provide bank statements as proof, along with a letter confirming that the donation is a gift and not a loan. 

If the gift funds are added to the buyer’s bank account after settlement, then documentation will still be required before it can be applied to the purchase. Typically, this will require a receipt of the cashier’s check as given to the closing agent.

Partner with top-rated Farmington Hills MI REALTOR® -Tom Gilliam

Whether you are interested in buying a home in Farmington Hills, MI, or its time to list your current property, experience matters most in a changing market.

Offering over 20 years of local experience, top-rated Farmington Hills REALTOR® – Tom Gilliam offers in-depth local market knowledge and access to the most up-to-date listings. Tom is known for his professionalism and is an expert at uncovering the perfect home for his clients’ lifestyle needs in the right Farmington Hills neighborhood or community. 

2020 Best of Farmington Hills REALTOR - Tom GilliamFor sellers, Tom will create a comprehensive marketing plan that exposes your home to the public as well as to other real estate agents through the Multiple Listing Service (MLS), other cooperative marketing networks, open houses for agents, and so on.

Your listing will appear on all the most popular real estate sites where buyers spend hours a day looking at homes such as Realtor.com, Zillow, Trulia, REMAX, Redfin, and dozens of others.

Your property will also be featured on Tom’s own highly-trafficked website Homes2moveyou.comYou can be assured that your home will get sold quickly and for the highest market price.  

Farmington Hill MI Homes for Sale

Tom works very hard for his clients. As your agent, he will protect your interests, negotiate on your behalf, advocate for you, and be your trusted guide and advisor throughout the home buying or selling process.

If you or someone you know is interested in Farmington Hills MI real estate, please give Tom Gilliam a call today at (248) 790-5594 or you can reach him here.

Tom Gilliam, REALTOR®
RE/MAX Classic
29630 Orchard Lake Rd.
Farmington Hills 48334
Direct: 248-790-5594
Office: 248-737-6800
Email: Tom @ Homes2MoveYou.com
License #314578

 

 

Fannie Mae & Freddie Mac Offering Help to Homeowners During COVID-19 Crisis

Fannie Mae & Freddie Mac Offering Help to Homeowners During COVID-19 Crisis

Fannie Mae & Freddie Mac are extending help to millions of homeowners facing financial hardships as a result of COVID-19. 

Both Fannie Mae and Freddie Mac help stabilize mortgage markets and protect housing during extraordinary periods when stress or turmoil in the broader financial system threaten the economy such as the current COVID-19 pandemic.

Nearly half of the nation’s mortgages are owned or backed by Fannie Mae or Freddie Mac.

The swift wave of unemployment and financial hardships from furloughs, reduced wages, and commission cuts have left many homeowners worried about how they will make their mortgage payments in the coming months, but relief options are available.

If you are unable to make your mortgage payment, it’s important to call your lender as soon as possible. That said, reaching your lender can take some time because financial institutions are being bombarded with so many calls.

The Consumer Financial Protection Bureau provided guidance on what to do if you can’t pay your mortgage and what options are available as part of the Cares Act signed in law on March 27.

The CARES Act puts in place two protections for homeowners with federally backed mortgages:

  • A foreclosure moratorium
  • A right to forbearance for homeowners who are experiencing financial hardship due to the COVID-19 emergency

Both Fannie Mae & Freddie Mac are offering help to homeowners to get through this crisis without losing their homes. If you don’t have a federally backed mortgage, you still may have relief options through your mortgage servicer or from your state. 

To look up whether or not your mortgage is owned or backed by Fannie Mae or Freddie Mac, you can click these links:

Fannie Mae  

Fannie Mae said it will suspend foreclosure sales and evictions of borrowers for 60 days, according to the company statement. In addition, homeowners are eligible for a forbearance plan to reduce or suspend their mortgage payments for up to 12 months.

If Fannie Mae owns your mortgage loan, their Disaster Response Network™ (DRN) can help you navigate the mortgage relief process and address other financial challenges.

You can visit KnowYourOptions.com to learn about available mortgage assistance and relief options from Fannie Mae.

Freddie Mac

Freddie Mac is also taking action to help make sure homeowners with Freddie Mac-owned mortgages who are directly or indirectly impacted by COVID–19 are able to stay in their homes during this challenging time.

Freddie Mac is offering options like mortgage forbearance for up to 12 months, waiving of assessments of penalties and late fees, halting foreclosure actions and evictions of borrowers living in Freddie Mac-owned homes until at least May 17, 2020, and loan modification options that lower payments or keep payments the same after the forbearance period. 

You can learn more about Freddie Mac’s mortgage relief options to help homeowners by visiting My Home by Freddie Mac®.  

Borrowers who may be experiencing financial challenges due to COVID-19 are strongly encouraged to contact their mortgage servicer (the company listed on your monthly statement) so they can explore Fannie Mae and Freddie Mac’s workout options.

To be eligible for protections under the CARES Act, your mortgage must be federally owned or otherwise backed by one of the federal agencies and entities listed below:

Additional Mortgage Relief Options

Many states are implementing or considering various mortgage relief options, including the suspension of foreclosures, as well as additional assistance for homeowners. Check your state’s government website for details.

Farmington Hills MI REALTOR® – Tom Gilliam

 2020 Best of Farmington Hills REALTOR - Tom GilliamWhether you are interested in Farmington Hills homes for sale or you are ready to list your current property, Tom Gilliam provides the kind of knowledge, skills, dedication, and personalized service you need and deserve.

Tom will take the time to listen to your needs and concerns, keep you informed every step of the way, and will go above and beyond to ensure a smooth and successful transaction.

To find out more about buying or selling Farmington Hills MI real estate, please contact Tom today at 248-790-5594 or you can get in touch here.

Tom Gilliam, REALTOR®
RE/MAX Classic
29630 Orchard Lake Rd.
Farmington Hills 48334
Call: 248-790-5594
Office: 248-737-6800
Email: Tom @ Homes2MoveYou.com
License #301741

 

 

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