Is The Down Payment Preventing Home Ownership?

Everyone is talking about how low Nevada home prices have fallen and the record low interest rates currently available.  In today’s market, you can own a home for considerably less than the cost of renting. If the down payment is the only thing keeping you from owning your own home, I have great news for you.

With the Nevada Housing Division Down Nevada firsttime buyer down payment assistance
and Closing Cost Loan Program, you may qualify for your own home with little or no money down.  The program is primarily for first–time homebuyers, although there are exceptions for homes located within the “targeted area”.

The program provides up to $4,500 in down payment and closing cost assistance.  The $4,500 is in the form a second mortgage. The loan is a fixed rate, 20-year loan and the current interest rate is 7%.  The current payment is $34.89 per month. This is combined with a FHA, VA, or RHS 30-year fixed rate mortgage. The interest rate is supported through the State’s sale of bonds. The current interest rate is only 3.5%.

Let us suppose you were purchasing a home for $85,000 with an FHA mortgage. FHA requires a 3.5% down payment. Based on a $85,000 purchase, your down payment is $2,975. The NHD Down Payment and Closing Cost Loan Program provides a $4,500 second loan to be used for your 3.5% down payment and to help you with your closing costs. In this scenario, you would have $1,525 remaining from the $4.500 to help with your closing costs.

I recommend asking the seller to contribute to your closing costs also.  Although FHA allows a seller to pay up to 6% toward the buyer’s closing costs, most sellers are unwilling to contribute more than 3%.  If the seller contributes $2,550 or 3% of $85K, you will have $4,075 toward your closing costs. You will be able to buy the home with little or no money out of pocket.

Based on our $85,000 purchase price, your principle, interest, and MI payment for the first mortgage would be $449.93 and your payment on the second is $34.89 totaling $484.82. You will also have homeowner’s insurance, property taxes and possibly HOA fees if the home is located within a homeowners association. Your total monthly payment will be between $625 and $700 per month (depending on the property taxes and hazard insurance)

My clients have been buying beautiful, 3 bedroom, 2 bath homes located in the North Valleys, Stead, Cold Springs, Sun Valley and Sparks for $70,000 to $125,000. They are now homeowners with all of the pride and privileges associated with owning your own home. Owning a home has never been more affordable. If the only thing preventing you from taking advantage of the today’s low home prices and the lowest interest rates in history, Call me @ 775-250-4421. Isn’t it time you owned your own home?


Reno Mortgage