Down payment assistance is a hot topic in the mortgage industry right now, especially for first-time home buyers who struggle to provide a 20% down payment. Although a 20% down payment is not required, there are advantages to putting such a large amount down.
Shared equity programs are an emerging resource in the mortgage market that help home buyers reach the 20% down payment threshold, filling a huge need in the industry.
A shared equity program means a home buyer and a shared equity partner combine resources to jointly provide a 20% down payment; this means the home buyer has no mortgage insurance and has a lower principal and interest payment. The home buyer benefits by saving hundreds of dollars each month. The shared equity partner receives a portion of the home’s appreciation at time of sale and may, in certain circumstances, share in losses due to home deprecation. This true partnership further protects the homeowner.
Comments are closed.