lazy8 Posted August 19, 2003 Report Share Posted August 19, 2003 I am looking for a mortgage that will give me a lower interest rate than 6% and a 3 year arm looks pretty good. The thing is that for all these they want 5% down. I had heard of these down payment assistance programs and started to do some research on it but still can't figure out how these work. Have you heard of this place http://www.buyers-assistance.com/ ? Do you have any advice for someone without the cash to make a 5% down payment? Link to comment Share on other sites More sharing options...
firstsource Posted August 19, 2003 Report Share Posted August 19, 2003 I guess you know that anything over a 80% loan has a higher risk, and therefore higher rates. To get a 100% loan (Or an 80/20 combination) you will have to go with a sub-prime lender, and then re-finance in 2 years or so when your equity in your home is 5% or more.Or:You can go with FHA, I think that current rates are about 6.5 now, and work with a gift program like Neighborhood Gold (on the web). In those plans, the seller is allowed to "gift" you, through the program the down payment. Charles Link to comment Share on other sites More sharing options...
doublebuchi Posted September 1, 2003 Report Share Posted September 1, 2003 Charles,I see on my fha good faith estimate, that the NEAMIA (is that right?) which is 1 of the gift programs, I have to pay the builder back. I mean MEAMIA is gifting the down payment, the builder will have to make a contribution and they are adding that contribution to my mortgage. Is this the norm? Link to comment Share on other sites More sharing options...
amortgageman Posted September 1, 2003 Report Share Posted September 1, 2003 doublebuchi,I hope this is not the case, and that you are reading the GFE wrong.With almost all down payment assistance programs (Nehemiah included, the seller (or builder in this case), provides the down payment assistance, and no the buyer is not required to pay this back. No way. It is a gifted down payment and cannot be charged back to the buyer.These programs work this way: They are usually non profit organizations with a pool of money esablished to disburse to homeowners for down payment assistance. When you apply for one of these programs, you are accessing money from the pool. This money is then disbursed at your closing.The seller provides an apllication to participate in the plan. They pledge a certain amount to the fund either in flat dollar amounts or as a percentage of the sale price. The seller also pays a service fee to the program for handling costs (overhead). This pledge is then deducted from the sellers proceeds at closing, and kind of like a second mortgage or other lien, must be paid back to the plan to close the loan. The reality is, that was not the sellers money that enabled the nonprofit to contribute. The seller is not contributing to the plan until the loan closes. Link to comment Share on other sites More sharing options...
firstsource Posted September 1, 2003 Report Share Posted September 1, 2003 I am sure that Bruce would agree with me, that anyone that has questions once they have seen a Good Faith Estimate, send it to one of us, and we will be glad to look at it for anything that should not be on there, or excessive "junk" fees.Charles Link to comment Share on other sites More sharing options...
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