With a fair-sized down payment, prospective homeowners can save a considerable amount on their mortgage payments. Unfortunately, saving up for a down payment is among the biggest obstacles that prevent renters from becoming homeowners. The good news is that many markets, including those in Missouri, offer assistance programs that can help first-time home buyers cover these initial costs. If you’re looking to purchase your first home, here are a few tips that can help you get the funds you need to make a down payment.

5 Down Payment Assistance Tips for First-Time Home Buyers

1. Research Program Providers

Down payment assistance programs vary across the country, so it’s important to know what’s available through your regional market. Commonly, these programs are made available through state agencies. However, some may be offered directly through local lenders. To pinpoint your best options, talk to a mortgage loan officer.

2. Determine Eligibility

Typically, eligibility will be determined by income. For instance, you will need to make less than a certain amount as established by the program application. You’ll also need to be a first-time home buyer. However, there are some circumstances where you may qualify as a first-time buyer if you haven’t owned a home in several years.

3. Consider Credit Improvements

If you’re not already prequalified for a mortgage, your credit score may impact your eligibility for down payment assistance. If you have a low score, taking steps to improve your credit—such as by paying off smaller debts—can help improve your chances of being approved for assistance.

4. Know the Terms

Not all down payment assistance programs function under the same terms. Some may provide the money in the form of a grant, whereas others may treat the funds as a loan. As an example, the Cash Assistance Loan program through the Missouri Housing Development Commission provides assistance through a second mortgage. If the borrower maintains their first home loan for ten years, this second mortgage can be forgiven.

5. Uncover Lending Alternatives

If down payment assistance isn’t right for you, talk to your mortgage loan officer about alternative solutions that can help you enter the market. For example, FHA loans are federally backed and can help you secure a home with as little as 4% down. Veterans and members of the military can also qualify for a VA loan—a low-interest mortgage that requires no down payment.

When financing is preventing you from entering the real estate market as a first-time home buyer, turn to Dan Main—a trusted mortgage loan officer in Saint Peters, MO. Serving consumers for more than two decades, Main has a reputation for helping clients find affordable solutions that simplify the home financing process.  To learn more about how this professional can help with everything from down payment assistance to VA loans, visit his website. If you’d like to set up a consultation, call (636) 284-4144.

Dan Main: NMLS # 502036
Flat Branch Home Loans NMLS # 224149
947 Waterbury Falls Dr
O’Fallon, MO 63368
This is for informational purposes only and not an offer to lend or extend credit.