Buying a house, especially when it’s your first time to purchase one, can be an overwhelming experience if you don’t plan it carefully. Aside from the location, size and design of the house, the most important factor that one has to put in mind is payment options.
Of course if you have the ready cash to finance your family home in one payment, there is no hassle at all. Unfortunately however, that is not how things work for most buyers. Now if you wait for the time till you have saved enough money to acquire your first home, it might take you many years before it can happen. Consider therefore, the following payment options:
- Take the $8,000 tax credit for first time homebuyers. One of the best ways to secure this tax credit is through insurance coverage. This way you don’t need to use your own money for the down payment because the insurance will pay for it. Take note however that you need to pay the insurance fee every month to maintain your coverage benefit.
- Secure a VA (Veteran’s Administration) loan. The VA loan is a mortgage loan granted by the Department of Veterans Affairs in the United States to American veterans or their surviving spouses who have not remarried. Due to limited housing credit the VA home financing loan is available for purchases only in designated areas throughout the U.S.
- Apply for Federal Housing Administration (FHA) loan. This loan assistance is granted by the U.S. government to enable first buyers to acquire homes that they otherwise cannot afford. One of the programs of this loan program is to provide regulated rate mortgages which are adjusted every year depending on the prevailing market situation.
- Take the option of piggy back loans. Ideally, a buyer has to pay at least 25 percent of the total value of the house he is purchasing. The rest of the amount may be paid through a loan grant from a lender or financing company. Under the piggy back loans, if the buyer still cannot afford to pay the 25 percent down payment, he can mortgage the property to another lender (second mortgage) to cover the remaining unpaid amount. Be wary however that interest rates are high for this option.
- Make use of homeownership plans for single parents. The government is ready to give assistance to single parents by granting them special loan packages to qualify them to own a home. There are counselors who can give advice on how a single parent can avail of housing benefits from the government.
- Avail of sub-prime loans. If you want to purchase a home but you have a bad credit, you may seek the assistance of sub-prime lenders that are willing to give full funding for your first home.
- Consider a co-owner who can help you pay your house. You can be the owner of your dream home by buying it with a relative or friend. The payment is shared thereby making the amortization more affordable for you. Legalities are needed though, and you may need to consult your lawyer to iron out legal questions and issues involved in co-ownership.
Owning a house is one of the most cherished dreams of many American families. But when buying one, try to come up with the best purchase deal as possible and make sure you choose payment options that you can afford to maintain.