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4 quick ways to buy your home with little down

Are you wasting thousands of dollars on rent and dreaming of becoming a homeowner in Southeast Valley? You can already make a monthly house payment (you’re already paying rent), but the problem is coming up with the money for a down payment. It’s not as difficult as you might think.

 

Here are 4 ways to get a down payment with little out of your own pocket.

 

1. Look Into Local or Federal Government Programs.

Many Arizona first-time buyers believe that a 20% down payment is required to qualify for a mortgage. Programs from the Federal Housing Authority, Freddie Mac, and Fannie Mae all allow for down payments as low as 3%. Veterans Affairs Loans allow many veterans to purchase a home with 0% down. Additional resources are non- profit and community groups and state agencies. There are too many programs to list here and they expire or change frequently. Your best option is to ask your trusted REALTOR ® to point out a few programs that apply to your area and situation.

 

2. Have the Seller Finance You.

Some sellers may be willing to help you buy their homes. In a “seller take-back,” the seller holds a second mortgage for you and becomes your lender. You would make your monthly mortgage payments to the seller.

Seller Finance_Maricopa

Are you looking to purchase a home in Maricopa County with seller finance?

The Barton Group has a program that offers Seller financing on Maricopa County properties priced at $225,000 and below. Minimum down payment between $10K-$15K depending on the purchase price. Interest rate to be discussed based on the borrower. The borrower will be approved based on down payment and income. 

See available properties in:

We can help find off-market properties not listed on the MLS. Call/text us at 480-242- 3079 for details.

3. Use A Tax Refund.

According to data released by the Internal Revenue Service (IRS), Americans had an estimated average refund of over $2,800 last year when filing their taxes.1 There are options for you to borrow money for certain investments to a specific level and use those investments to generate a significant tax refund. Obviously, the timing has to be right so you can use it as a down payment on a home. The IRS will start processing tax returns for the 2019 tax year on Jan. 27, 2020. 

tax refund

When will I receive my tax refunds?

If you e-file your tax return and the IRS accepts it on January 27th, you can expect to receive your refund within 21 days which is by Feb. 17. The IRS typically issues tax refunds once a week (on Fridays), so your most likely direct deposit date would be Feb. 14. If you choose to receive your refund by paper check, it will take longer.

If you claim either the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) on your return, your refund could potentially be delayed. The IRS is required to hold all refunds that claim these credits until at least Feb. 15.

You should be able to see the status of your tax return 24 hours after you e-file or four weeks after you mail a paper tax return. An exact refund date will be listed as soon as the IRS processes your return and approves your refund.

4. Ask A Relative or Friend.

Tax law allows gifts of up to $14,000 a year to be given without tax consequences to the giver or recipient. This gift-exclusion amount is adjusted annually to reflect inflation (see IRS publication 950 for the current amount). You can even get a gift from each of your parents or two friends without them having to pay a gift-tax, which brings it up to $28,000.

This is a great way to get a down payment for a home. In fact, one out of four first- time homebuyers use a gift to make the down payment. Even if this isn’t your first home purchase you can still use a gift so you don’t drain your savings. Usually, lenders require you to have some money still left in your bank account after closing so they know you’ll make the mortgage payment each month.

Also, using a gift for a down payment allows you to buy the home you want even if it’s not FHA-approved. Some buyers are able to get Federal Housing Administration (FHA) mortgages that have down payments as low as 3.5% of the purchase price, but others will have to put more down. With a gift, you can put the typical 10% to 20% down that most lenders require. For example, if you had to put down 10% on a $150,000 home, that’s $15,000. Or, 20% would be $30,000. A gift from relatives and friends can get you there but some of the rules differ depending on the lender you choose. Talk to your loan officer before you accept the money.

 

WE'RE HERE TO GUIDE YOU

Your best bet is to contact a well-connected REALTOR ® before you start looking at homes. If you are considering buying or selling your Southeast Valley home in 2020, contact us to schedule a free consultation. Call/text Tina at 480-242-3079 or email info@info@thebartongroupaz.com. 

 

Sources: 

1. Nasdaq

https://www.nasdaq.com/articles/expecting-a-tax-refund-in-2020-heres-how-soon-you-can-file-your-tax-return-2020-01-11

2. National Association of Realtors

https://magazine.realtor/news-and-commentary/economy/article/2019/07/be-nice-to-grandma