Many first time home buyers are not prepared to pay for down payments or closing costs on their loans. But, the good news is that funds are available for many of these buyers, who may qualify for grants or loans to help them purchase their first home.
In today’s hot seller’s market across the nation, and especially here locally in the San Antonio, Texas area, where many of our buyers are FHA or VA customers, closing costs requests to sellers may leave you standing in line for your dream home. Most sellers are not willing to pay for any buyer concessions, and they are getting almost 99.9 percent of their listed price with some getting multiple offers. Buyers who need down payment and closing costs assistance need to search for other resources for these funds. One such source is the Texas Department of Housing & Community Affairs(TDHCA).
As of April 17, 2015, see the TDHCA site for available funds in Texas. Buyers must utilized approved lenders on the list, or request their lenders to apply to be added to the list. There are also eligibility and income requirements for buyers. Lenders and buyer’s agents will be able to assist first time home buyers in finding the right programs that can help them obtain down payment and closing costs assistance. Buyers may also consider asking for “gift funds” from family members.
Wells Fargo Banks launched a Neighbor Lift Program in January 2015 to assist buyers with up to $15,000 in down payment and closing costs assistance. San Antonio also offers the Homeownership Incentive Program(HIP) to qualified buyers. Buyers are normally required to attend classes on homeownership and obtaining loans. Funds go quickly on many of these programs, and they work on a “First Come, First Serve” basis. Therefore, if you’re a first time home buyer, who needs assistance with any of these programs, you’ll need to apply today, while funds are still available.
Another option to consider will be to purchase a new construction home in the San Antonio area. Many new home builders are offering incentives on their homes, and many of them are including paying for the buyer’s closing costs. Of course, most of the time some new construction home builders will insist on going through their own in house lenders to get approved for their incentives.
Getting pre-approval for a loan today is more difficult than it was a few years ago, and many lenders are requiring buyers to have two or three months worth of cash reserves to help in case of emergencies. Yes, emergencies do happen, and as a new homeowner you have now become your own landlord, and will need to fix problems yourself that may arise. Saving up for your own closing costs and down payments for your loans is a good idea in today’s seller’s market. How much will you normally need?
If you’re purchasing a home for $150,000 or less, you can expect your closing costs to be around $7,500 which include pre-paid items for homeowner’s insurance, property taxes, survey, appraisal fees, loan origination fees, underwriting fees, and a list of other fees, which your lender can provide you with an estimated loan information at the time you get pre-approved for a loan. Knowing your costs ahead of time, and being prepared to make a good offer which doesn’t include buyers asking for seller’s contributions is a smart move in today’s hot seller’s market. Remember in San Antonio, Texas, the inventory for available homes is low, and you’re almost guaranteed to be competing with other buyers on the same properties.
Therefore research for resources that offer down payment and closing costs assistance. You may qualify for some of these grants and loans, and be able to obtain that dream home. These programs exist in the state of Texas, and in Bexar County. Work with a knowledgeable broker/agent, who can assist you in the home buying process to find these programs if you need assistance with down payments and closing costs.
Getting pre-approval first, and finding the right broker/agent will certainly help you in a smoother home buying process, and avoid disappointments while competing with other buyers in a hot seller’s market. There have been stories how buyers are going after their third or fourth home after losing out on the bidding wars in this competitive market. Being fully prepared and knowledgeable will help you get your offer accepted the first time around.
If you’re thinking about purchasing a home in the San Antonio area, and looking for someone to guide you, to represent you, and to help you obtain your first home or your dream home, contact Jerry Today at 210.789.4216. You may also search for Homes in San Antonio on my website, and let me know whenever you’re ready to start viewing homes. I would love to work with you from pre-contract to the actual closing. Working with first time home buyers has always been a passion since I first started in the real estate industry.
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Jerry Newman, REALTOR®
US Army Retired
Brown Realty
1802 NE Loop 410 Ste 520
San Antonio, TX 78217
Direct 210-789-4216
Helping and Serving the real estate needs of buyers and sellers in the Greater San Antonio, Bexar County, and all the surrounding areas.
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