down payment assistance: Homebuyer Tax Credit Redefined - 05/29/09 09:53 PM
The FHA appeard to be allowing homebuyers to use income tax credits for their entire 3.5% down payment but concerns this too closely resembled seller paid down payment assistance cause them to re-define this program. Borrowers applying for an FHA loan will still be required to come up with a minimum 3.5 percent down payment, but will be able to use the tax credit for additional down payment or for other closing costs. "Unlike seller-funded down-payment assistance, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit," HUD Secretary Shaun Donovan said in a statement. Note:
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down payment assistance: Creative solutions for down payments & closing costs for your home purchase - 07/03/08 08:17 AM
Lenders have tightened their guidelines & buyers are again are expected to "put some skin in the game." That "skin" refers to the borrower's own cash for the down payment & closing costs. Benefits of a down payment: *If you want the seller to pay the costs, discuss that concession upfront, before you sign a purchase contract because it affects the seller's net proceeds from the transaction. **Borrowers can reduce or even eliminate closing costs by paying a higher interest rate on their mortgage. The rule of thumb is an additional 1/8% higher interest rate will net a credit against closing costs
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