H.O.M.E. Closing Cost Assistance
United Home Loans is lending a helping hand to first-time home buyers for a limited time by making the first steps toward homeownership more affordable with a 2% lender contribution, up to $5,000, in closing cost assistance and to offset prepaid expenses.
A Look at Homeownership
When you compare the monthly housing expense of homeownership versus renting, homeownership makes the most financial sense almost every time. You can get more house for the same amount of money or even less than what you pay the landlord every month. Not only that, but homeownership builds wealth and renting does not. The longer you live in your home the more equity you build. And equity gives you options. You can sell your home down the line and use the equity as a down payment on the next one, or cash out the equity through a cash-out refinance and use the money to pay off debts or finance improvements. Overall, homeownership is a winning financial game plan.
Now comes one of the most common barriers to reaching that financial positioning: upfront costs. Purchasing a home as a first-time buyer requires a down payment plus funds for closing and prepaid expenses, such as taxes and insurance. If your savings fall short of affording the upfront cost + leaving a cushion in the bank, you may find yourself in need of closing cost assistance.
What Does Closing Cost Assistance Cover?
Closing costs typically amount to 2-4% of your loan amount and encompass the items you will need to both knowledgeably purchase your home and meet the requirements of your lender. Closing cost assistance is applied to items such as the appraisal, title insurance, and credit report fee.
Cash to Close vs. Closing Costs
There are closing costs and then there is an amount known as your cash to close. Cash to close is your closing costs, plus the down payment, minus any credits and deposits. As the name implies, your cash to close is how much you will need to bring to the table on closing day.
Closing cost assistance does not apply to the down payment. But, luckily, there are great first-time buyer loan programs available that will help you minimize your down payment. With a lower down payment and closing cost assistance, your overall cash to close could be more affordable than you think.
1st-Time Buyer Assistance
Closing cost assistance isn’t the only solution available to first-time buyers. As previously mentioned, first-time home buyers have access to loan programs with the lowest down payments possible. HomeReady and HomePossible allow you to put just 3% down on your first home. That’s even lower than the minimum down payment required for an FHA Loan. In addition, these first-time buyer programs offer lower interest rates and more forgiving credit requirements. And, unlike an FHA Loan, they do not require upfront mortgage insurance. All of these benefits, individually, are designed to lower the barriers to first-time homeownership. In combination, the path to buying a home looks wide open.
The Home Ownership Made Easy program is exclusively offered by United Home Loans. Unlike down payment assistance, our closing cost assistance does not trade off upfront financial help with a higher interest rate, thereby increasing your monthly payment. H.O.M.E. is simple help from the funds of United Home Loans to you.
The H.O.M.E. program is designated for local borrowers who need a little extra help in achieving homeownership. To receive closing cost assistance your income must be at or below 120% of the area median income limit and is available to those purchasing a home in Illinois, Wisconsin, or Tennessee. This program can be combined with conventional, HomeReady, HomePossible, FHA, VA, or Agency First Time Buyer loans. That list of loan programs may seem long, but a mortgage banker will be right by your side to guide you through all your options and help you choose the best one for your financial plans.
Homeownership starts here. Fill out the contact form below or give us a call to start the educational homebuying process. (708) 531-8388