Welcome back to another What’s Up Wednesday! Today, we’re going to be discussing all things finance. We’ll talk about different financing opportunities and some options to bring low or little money to the closing table.
USDA Loans
A USDA loan is 100% financing and it is location specific. In Savannah, anywhere West of i-95, Brian County, and Effingham County will be eligible for this loan program.
VA Loans
VA loans are also 100% financing. There is a funding fee with this one and in order to qualify, you have to have served in the military at some point. You don’t have to necessarily be a first time home buyer with this one or USDA.
Georgia Dream
Georgia Dream is specifically geared towards first time home buyers. It is an FHA loan and there is a secondary loan that they give you, which is the grant part of it. You do pay that back when you sell your property. And then the amount that you get from Georgia Dream is going to depend on your eligibility and what’s available in their funds when you go to apply. So it may cover just closing costs or just down payment or it may cover both. And if it covers one and not the other, we’re going to talk about some ways to still bring a minimum amount of money to the closing table.
FHA Loans
Your FHA loan, which is part of your Georgia dream, is for first time home buyers. So you do put a lower amount down. So you put 3.5% down and then not the main thing here, but one of the things that you do want to make sure you’re keeping in mind when you’re looking for houses with FHA loan is making sure the condition of the property qualifies. They want to make sure that the house is in livable condition, which means no leaks in the roof, you have to have heat in the house, no chipping paints, water leaking, etc.
Conventional Loans
With conventional loans, they depend on what your debt to income ratio is and what your credit score is. But they do have options for 3% down. And if you are a physician, they have 100% financing option out there.
Decreasing Closing Costs
It’s completely possible to get seller credits if you negotiate well. Right now the great thing about our market is that houses are sitting on the market a little longer, so sellers are more willing to negotiate to get their house under contract and to get their house sold. So typically, your closing costs are around 4% of the purchase price. And we can ask the seller depending on what loan it is. Some of them do have a restriction on the percent that you can ask for, but generally speaking, we can ask the seller for some type of credit towards closing cost. When Shanneé (one of our Buyer Specialists) bought her first house with a Georgia Dream, she paid her earnest money, which was $1,000 (which is a requirement), and got the seller to pay her closing costs, and ended up bringing $53 to the closing table. So, it’s definitely something that you can do even if you don’t have thousands and thousands of dollars saved. And these are some options that you can look into.
You’re really going to want to talk to a realtor and a lender to get more specifics on your financial situation. So when you do go to buy a house, we know exactly what your strategy is going to be.
Let us know if you have any questions! We’re happy to guide you along in the process!