Home Ownership May be More Affordable than You Think

October 06, 2016

Are you dreaming of owning your own home? Are you thinking that you can’t afford to buy a home so you continue to pay rent? Buying your first home may be more affordable than you think.

Sharing Closing Costs

Many lenders offer first-time homebuyers different programs to make buying a home more affordable. One way to save money is by working with the seller to have them pay a portion or all of your closing costs. Closing costs can vary widely based on the property you are buying and its location. Usually the cost of the inspection, appraisal fees, and running your credit report are part of the closing costs. Some lenders will allow the seller to pay up to six percent of the sales price in closing costs.

Shop for the Right Mortgage

A lot of first-time homebuyers worry about not having enough money for the down payment on their home. Traditional mortgage loans typically require at least five percent of the loan amount for a down payment. Shopping for a mortgage program that allows a lower down payment can get you into your first home quicker. For example, the ENB GreatStart HomeLoan™ only requires a 3% down payment. There are also mortgages available through the Federal Housing Administration (FHA) that allow lower down payments and veterans should explore programs through the Veterans Administration (VA). Some programs even allow you to use a gift or an approved grant for a portion of your down payment.

Most conventional loans require private mortgage insurance (PMI) if the buyer is not able to make a down payment of 20% or more. According to Bank Rate, private mortgage insurance fees can range between 0.3% and 1.5% of the original loan amount each year. So finding a first-time homebuyer program that does not have a PMI requirement can save a homeowner a large amount annually.

These are just a few ways that you can make buying your first home more affordable. To learn more about how you can make your home ownership dream a reality, contact an ENB Mortgage Expert. They’ll be happy to find a first-time home buyer program that’s right for you.