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6 Creative Ways to Afford a Home
If your income
and savings are making homebuying a challenge, consider these options.
1.
Investigate local, state, and national downpayment assistance programs.
These programs give loans or grants to cover all or part of your required
downpayment. National programs include the Nehemiah program (http://www.getdownpayment.com)
and the American Dream Downpayment Fund from the U.S. Department of Housing and
Urban Development (http://www.hud.gov).
2.
Get the seller to provide financing. In some cases, sellers may be
willing to finance all or part of the purchase price of the home and let you
repay them gradually, just as you do a mortgage.
3.
Consider a shared-appreciation, or shared equity, arrangement. Under this
arrangement, your family, friends, or even a third-party may buy a portion of
the home and thus share in any appreciation when the home is sold. The
owner/occupant usually pays the mortgage, property taxes, and all maintenance
costs, but all investors’ names are usually on the mortgage. There are
companies that can help you find such an investor if your family can’t
participate.
4.
Get help from your family. Perhaps a family member will loan you money
for the downpayment and/or act as a cosigner for the mortgage. Lenders often
like to have a cosigner if you have little credit history.
5.
Lease with the option to buy. Renting the home for a year or more will
give you the chance to save more toward your downpayment. And in many cases,
owners will apply some of the rental amount toward the purchase price. You
usually have to pay a small, nonrefundable option fee to the owner.
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