One of the biggest obstacles to homeownership is often the down payment. If you want to purchase a home, but are struggling with this issue, follow these tips from Down Payment Resource, a trusted partner with the Greater Lansing Association of REALTORS®, to help overcome the down payment hurdle. 

Automate your savings

Down Payment Resource suggests having a portion of your paycheck automatically deposited into an account specifically reserved for your home purchase. Remember, in addition to a down payment you will also need extra funds for closing costs, movers, and possibly items for your new home, like appliances or window treatments. Any extra savings you can build is helpful. 

There are also “round up” programs through different banking institutions that will round up your purchases to the nearest dollar. That extra change adds up over time and can be a big help when you are ready to purchase. 

Gift money 

More than a quarter of first-time homebuyers get down payment help from family, according to Down Payment Resource. This is a popular solution; however, if this is something you are considering, make sure you know all of the rules ahead of time. 

Typically, for a conventional mortgage, if you put down 20 percent or more it can all be from a gift. If your down payment is less than 20 percent, part of it must be your own money, although this varies from lender to lender. Gift money needs to come from an immediate family member, and you need to show documentation of where the funds came from. If you plan on using gift money for a down payment, it is best to speak to your lender first to make sure you have all the information. 

Fix credit first

Credit has a lot to do with determining the type of loan you can get. So, the better your credit score, the more options you might have, including possible options for a lower down payment. Any professional lender should be able to help their clients come up with a plan to tackle this task. 

Down payment assistance programs 

Many buyers overlook down payment assistance programs because they think they won’t qualify. Down Payment Resource says that only two percent of first-time homebuyers use a down payment assistance program. The site adds that it makes sense to investigate this option as there are “approximately 2,400 programs available across the county and 87 percent of for-sale homes eligible for a program.”

Down Payment Resource has created a comprehensive online tool to make the search for down payment assistance programs easy. You can easily access it using the home search on the Greater Lansing Association of REALTORS® website, www.lansing-realestate.com. This tool not only explains how down payment assistance works, but it also allows you to check your eligibility. By answering a few quick questions, the site will pull up all of the area programs that may match your circumstances.

If you are getting ready to purchase your first home, and need some more guidance on available programs, contact a local REALTOR® and lender. 

Visit the Greater Lansing Association of REALTORS® website at www.lansing-realestate.com to find a listing of REALTORS® and mortgage professionals in the area.