Buy a Home, Hang on to Your Cash
These 3 mortgage options keep your out-of-pocket costs to a minimum.
For most people, home ownership is a smart financial decision that also offers a sense of pride, security and peace of mind. Many of those same people, especially first-time home buyers, sometimes delay or avoid applying for a mortgage because they don’t have enough money to pay the fees and the down payment, or they don’t want to part with their entire nest egg to do so.
Does this sound like you? Don’t disqualify yourself from becoming a homeowner without first exploring the different mortgage options that allow you to buy a home with the least amount of cash.
While a mortgage allows you to pay for your home over time, there are two out-of-pocket costs that are due at closing:
- The down payment is a percentage of the home’s sale price that you pay up front. The more you are able to put down, the lower your monthly payments will be over the course of the loan.
- Closing costs are administrative fees charged as part of the home financing process that cover the loan origination, appraisal, credit report costs, taxes and insurance, title, recording, and funding for specific programs.
If you’re worried about not having enough money for these out-of-pocket costs, or you’re concerned about draining your cash reserves to cover them, you can put your mind at rest by speaking to your licensed CrossCountry Mortgage loan officer. There are several loan programs that not only have lower down payment requirements, but also give you options regarding your closing costs. These programs include:
FHA Home Loans
With an FHA home loan, you can finance your closing costs or negotiate with the seller to contribute toward them (up to 6% of the lesser of the home’s sale price or appraised value). FHA loans also have a lower down payment requirement of 3.5%.
USDA Rural Home Loans
The great benefits of a USDA rural home loan include 100% financing (meaning no down payment is required) and flexible income and credit requirements for those looking to buy outside of urban areas. You also may be able to finance the closing costs associated with a USDA rural home loan or negotiate with the seller to pay them for you.
VA Home Loans
A VA home loan also provides great benefits, such as 100% financing and no mortgage insurance for those who have served in the U.S. Armed Forces. With a VA loan, the only financeable closing cost charge is the VA funding fee; all other closing costs must be paid at closing. However, the seller can pay up to 4% of your closing costs (only certain fees fall under this 4%).
Take the next step today!
We’re always happy to discuss your specific situation, understand your goals, and walk you through every step of the process to get you qualified for a loan that’s right for you. If you want the best of both worlds—buying a home and keeping your cash—your licensed CrossCountry Mortgage loan officer can help you make it happen. Start the conversation today!
CrossCountry Mortgage, LLC is an FHA Approved Lending Institution, and is not acting on behalf of or at the direction of HUD/FHA or the Federal government. All loans subject to underwriting approval. Certain restrictions apply. Certificate of Eligibility required for VA loans. CrossCountry Mortgage, LLC is an FHA Approved Lending Institution, and is not acting on behalf of or at the direction of HUD/FHA or the Federal government. All loans subject to underwriting approval. Certain restrictions apply. Certificate of Eligibility required for VA loans. USDA Loans: Borrower income limited to 115% of median income for the area. Borrowers must have reasonable credit histories. 30-year loan term. Housing costs cannot exceed 29% of income; total debt payments cannot exceed 41% of income. Homes must meet state and HCFP building codes. Funding fee required. Available only in designated USDA rural areas.