valentinosdcpulse: Think You Can’t Finance Your new D.C. New Home? – Think Again

Ideally, the best way to buy a new home in the Washington D.C. area would be to walk into the deal with a large bag of money. But since you are probably like most Americans, no matter how great that sounds, that option will always be just a dream. The average American living and working in the D.C. area will never have enough cash on hand to purchase a new home without having to borrow money. So, the average buyer without a big bag of money must educate themselves and carry a big bag of options from which they can optimize the best deal.

Most Commonly Suggested as The Best Way to Borrow Money is of course, to deal with a trusted local bank or mortgage lender who can give you the best prevailing rate and loan package that is currently available. Unfortunately, there are many people out there in today's economy who want to buy a home but just don't qualify under the current lending guidelines for such typical loans. Or maybe they just can't raise the needed down payment by themselves with today's economy and rising prices.

So how can this group of potential homeowners, young and old, save or raise enough money to get them out of the renting cycle and help put them into a new home?

Typically, there is no single magic solution. That is why it is so important to work with a Realtor^® like Rachel Valentino who is willing to help you "think out of the box." You will need a Realtor® on your side who believes in "if there is a will, there is a way" without putting you at great financial risk. In these cases, each case should be looked at individual; just like you are an individual with purpose and meaning.

Here are some examples of various examples of non-conventional financing:

Assumptions: This is where the buyer assumes the owner's existing mortgage and the seller's mortgage payments, if the seller's lender agrees. The buyer may or may not take over the seller's interest rate, depending on the individual circumstances.

 Mom Pop Mortgages: Here are just a few of the variations.

•  If your parents are in a solid financial position, it is possible that they may purchase the home and resell it to you at a much better rate than you were able to obtain elsewhere.

•  In some cases the parents may purchase a life insurance policy that meets or exceeds the mortgage price. When they die, the proceeds are used to pay off the mortgage with the non-taxable insurance money.

•  If your parents are in a solid financial position, it is possible that they may offer you a cash gift to be used in purchasing a new home. Lenders will want to see a legal document or letter showing all demands for such a gift is waived.

•  Parents with strong financial profiles often make great co-signers. This is a good option for people who basically fit the qualifications but are buying in an area where housing prices are high. Also when the deal is "on the edge," having such a co-signer may just make the deal happen.

Borrow the Down Payment. This can be from a traditional source such as a Credit Union or from a non-traditional source such as a relative or other known person. This may create an additional financial burden in addition to the mortgage, but this is an option when someone finds the right home and doesn't have the entire down payment saved up.  

You May Consider Equity Sharing where someone agrees to partner with you. They help make the down payment and share costs. You make monthly payments, keep up the property and make the necessary improvements as they arise. When you sell the property, you divide the profits with your partner. Sometimes family members are able to pull together to make this happen.

Investigate Tax-Free Bonds. Local and state governments often develop this solution to provide low interest loans to low-income people. Work with a Realtor^® such as Rachel Valentino to investigate whether this option may be for you.

And don't forget about the First Time Home Buyer Tax Credit. If you qualify and act before Oct 15^th to put your buying process into motion so that it's completed before Dec 1, 2009 - You may just have the additional $8,000 that you needed to make your dream a reality. Check out available homes in the DC area.

Ask your Realtor^® about other options that may pertain or be available to you. Some of these more untraditional resources may come with higher risk so it is important to work with an expert you can trust to explain each option fully to you.

The moral of this story is that if you really want to be a homeowner, you can be! Contact DC's top real estate expert Rachel Valentino today to discuss your options. She is #1 in the DC market for a reason - she loves to help others achieve their homeownership dreams. Let her help you by contacting her with any questions you may have.