One of the biggest obstacles to buying a home in Albuquerque is coming up with the down payment. This is especially true for first time buyers.
According to the NAR, 28% of home buyers 28 and younger had help from family or friends to come up with the down payment. With home buyers ages 29 to 38, 21% relied on down payment gifts.
Yet, this isn’t an option for everyone. So here’s how to save for a down payment without help:
1. Coddle your credit score
A higher credit score is the key that unlocks low-down-payment mortgage options, down payment assistance programs (more about those below), and attractive mortgage interest rates. Credit scores aren’t based on how much money you make, but how you manage the money and debts you have.
How to do it: Check your credit report often and fix any errors, keep your credit card balances low and pay them off when you can, and avoid late bill payments like the plague.
2. Seek out low-down-payment loans
Many people think you need a 20% down payment to buy a house — but they’re wrong. Qualified buyers can get a conventional loan with a down payment as low as 3%, an FHA loan with 3.5% down, or VA and USDA loans with no down payment at all. Lower down payment requirements can reduce the amount of time needed to gather sufficient funds, which means you may be closer to your housewarming party than you think.
How to do it: Contact lenders that specialize in low- and no-down-payment mortgages, to get a list of qualification requirements. If you’re not ready now, ask what you can do to get ready.
3. Take advantage of down payment assistance
New Mexico offers a down payment assistance program for first-time home buyers. Some city and county governments offer assistance as well. These programs may provide grants, as well as zero-interest forgivable or deferred-payment loans you can use as a down payment. These programs often have income limits and credit score requirements, and they may require you to complete a home buyer education class.
How to do it: Investigate first-time home buyer programs in New Mexico. Read over the eligibility requirements for down payment assistance. If you have any questions, feel free to contact us. We’re happy to offer any help you need to buy your first home in Albuquerque.
Looking to sell your home for the right price in Albuquerque? Let us help you sell your home in Albuquerque and get the right price. And make sure to join us twice a week on our blog for more great reasons to buy a home in Albuquerque and the surrounding area. Follow us on Facebook for the latest Albuquerque real estate updates.
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