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down payment

Georgia Dream Second Mortgage Program Standard Loan

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Georgia-Dream-first-time-home-owner-program

The Georgia Dream downpayment assistance, zero interest, the loan is a way for the state to help first-time homebuyers who meet certain income criteria.

This is a zero-interest loan and the money will have to be paid back if the property is sold or transfered.

Eligibility

First-Time Home Buyers, OR

Homebuyers who have not owned a home in the past three years, OR

Those who purchase a home in certain areas

Household income cannot exceed: 

1 or 2 persons: $84,000

3 or more persons: $96,000

Benefits

No Interest

No monthly payments

Funds can be used for downpayment, closing costs, prepaid and principal reduction

Maximum Amount

$7,500

Drawback

The money will have to be paid back when the house is sold or transferred.

See a list of programs you may qualify for based on where you plan to purchase.

Get downpayment assistance programs sent to you now!

Click on the link below to get a list of downpayment resources

Learn More

Georgia Dream Choice Downpayment Assistance Mortgage Program

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Georgia-Dream-first-time-home-owner-program-choice-option

If you live in the state of Georgia and a member of the household has a disability, you may qualify for up to $10,000 in downpayment assistance.

Eligibility

Protectors, Educators & Nurses (PEN) — or work for these industries or active military.

First-Time Home Buyers, OR

Homebuyers who have not owned a home in the past three years, OR

Those who purchase a home in certain areas

Household income cannot exceed: 

1 or 2 persons: $84,000

3 or more persons: $96,000

Get downpayment assistance programs sent to you now!

Click on the link below to get a list of downpayment resources

Learn More

Benefits

No Interest

No monthly payments

Funds can be used for the downpayment, closing costs, prepaid and principal reduction.

Maximum Amount

$10,000

Drawback

This is a loan. Therefore, it will have to be paid back when the property is sold or if the house is transferred to a new owner.

Would you Turn Down Nearly $30K? Dekalb County Homebuyer Assistance Program

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The WE DeKalb is a down payment assistance program for homeowners who wish to live in Dekalb County and use the property as their primary residence.

Even though this program is not limited to first-time homebuyers, it is a great opportunity to take full advantage of if you are looking to live in Dekalb County.

Get downpayment assistance programs sent to you now!

Click on the link below to get a list of downpayment resources

Learn More

What Does the WE Downpayment Assistant Program Offer?

The WE Dekbalb Downpayment Assistance program is a very generous county-wide grant to people who are looking to own a home in Dekalb County. Grantees can get as much as 5% of the purchase price of the house they are going to buy. Of course, there is a property value cut-off point, but this is definitely a generous program.

Eligibility

Must be owner-occupied

Property must be in DeKalb County

Minimum Credit Scores: 640

Debt to income ratio: 45%

Property types: 1-4 attached or detached units, condos, townhomes

Household Income Limit: FHA loan: $120,600, VA loan:$120,600, Freddie Mac HFA® Advantage: $65,760.

Home price Limit: FHA: $412,850, VA loan: $548,250, Freddie Mac HFA®, Advantage loan:$548,250.

Benefits

Grant of 3-5% of mortgage

Non-repayable

No pre-payment penalty

Maximum Amount

$3-5% of the mortgage

Drawback

none

Need more Information?

Need more information on the WE Dekalb homebuyer assistance program? Click here. and I will give you more information about the program.

Learn More

Get up to 5% back!

Home Mortgage Loan Process

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First-time-home-buyer

First Time Homebuyer Guide

For most people, buying a house can appear very intimidating; this is especially true for first-time homebuyers. However, if you know what to expect when you are ready to purchase your first home, the process will be less stressful and more exciting.

From this guide, you will be better prepared. You will know how much house you can afford, how you will finance this house, and the steps that you will take to buy your first property in Georgia. 

Are you ready to get started on your home buying journey? 

Please keep these tips in mind when you decide to finance your home purchase

Shop Around for Mortgage Quotes

Do not just go with the first lender that you meet and they make you an offer that you can work with.

Do not make the common first-time homebuyer mistake of going with the first lender that gives you an offer. Contact at least three lenders or financial institutions and receive a quote from them. This could potentially save you thousands of dollars over the life of your mortgage. Generally, you should always know what your credit score is throughout the year. 

Different Types of Home Loans.

There are different mortgage loans to choose from when it comes to buying a home. However, by speaking to your trusted real estate agent, or mortgage broker, you will discover the best path for you to take. In the United States, the vast majority of buyers finance their home purchase with either conventional loans, FHA loans, VA loans, or USDA home loans. A loan type out there will fit your lifestyle.

Price Range for Buying Your Home

Calculate your mortgage payment, including principal, interest, taxes, and insurance. Understand your mortgage rate as well as your budget. This will allow you to shop for a home and a mortgage with confidence. 

Get Preapproved Before you Begin Your Home Buying Journey

Pre-approval is a guarantee from a lender to finance your home purchase after they have verified your income and expenses. You will need this preapproval when you start to make offers on your next home. Most sellers will ignore offers from potential buyers who fail to include an approval letter from a lender. 

What is a Mortgage?

There are two main ways to purchase real estate: either you pay cash for the property or you borrow from a bank. This loan from the bank can be a portion of the asking price or the full amount of the asking price of the property. When you borrow money from a bank to buy real estate, the bank needs collateral as a guarantee for the loan. 

The property that you buy will stand as a guarantee for the loan. So in essence, when you take out a mortgage on a property, you are telling the bank to buy the house on your behalf and then you will pay back that bank (the amount you borrow plus interest). The money that you borrow and have to pay back is called the principal. The interest is the fee that you pay to the bank for securing the loan on behalf of the borrower. 

If you stop making your payments, typically the bank will ask that you vacate the premises as you have broken your promise to make timely payments. When a bank asks a borrower to vacate a property (due to a borrower no longer making payments) is known as foreclosure. When the bank regains ownership, it is now called a foreclosed property.

How Does a Mortgage Loan Work?

When you purchase a home with the help of a lender, the lender will give you a definite amount of money. You do not fully own the home until the mortgage is paid in full. At closing, the closing attorney will provide a schedule of payments over the life of the loan. This is called an amortization schedule. This document is given to the closing attorney to be presented to you.

When the seller accepts your offer, the bank will start working on securing the property for you. One of the first things that they will do is order an appraisal on the property. You will pay this money to the bank, but the bank will be in communication with the appraiser. The appraiser is there to find out exactly what the property is worth (fair market value) on the day that the property was appraised. The appraised value is very important to lenders, they will not lend more than what a property is appraised for. 

The interest rate that the bank quotes you for your mortgage is directly correlated to your perceived risk. That is because the mortgage interest rate is equal to the market rate plus your perceived risk percentage. That means that if you are seen as a risky borrower, your interest rate will be higher than someone who is viewed by the bank’s underwriting terms as less risky. 

What Parties are involved in a mortgage?

When it comes to securing a mortgage, only two parties are involved: the lender and the borrower. The lender is the institution or individual who will be securing the property and you make a promise to repay, with interest for securing the property on behalf of the lender.

The borrower is the person that is seeking the loan. A borrower can join with other qualifying buyers to buy a more expensive home. 

What would my mortgage payment be each month?

Your monthly mortgage payment is the amount that you pay every month toward your mortgage. Your monthly payment constitutes your principal, interest, taxes, and insurance payments. These payments are typically combined.

Principal Payments

A loan principal is the amount of the loan that is outstanding or the balance. 

Interest Payment

The interest payment on a loan is effectively a fee that is paid each month to the lender for securing the loan. This payment is in addition to the money that is paid back towards the principal payment. As the loan matures, more of the monthly payments will go directly towards the principal. 

Taxes and Insurance Payment

Most loan servicers will create an escrow account on your behalf. In this account, they will keep money that goes towards your loan. In addition, they will keep the money for your property taxes and property hazard insurance. It is pretty much always required for homes financed by banks to carry property insurance. Failure to do so is typically a violation of the loan terms. That means that if the property is burned to the ground or severely damaged, you will be on the hook for the balance of the loan.

The Mortgage Process

Buying a house, even if you cannot buy it cash outright, is easier than it appears. However, there are several steps that you will go through as a part of that process. 

Step 1: Get Approved

It is an excellent idea to be approved for a mortgage before you go shopping for a house. There is nothing worse than actually looking for a house, only to find out that it is out of your price range. This will save you and your agent plenty of time and emotional drain. 

Once the bank verifies your financial and income information, they will issue you a preapproval letter. This letter will be used by your agent to submit offers on your behalf. Typically, sellers will ignore offers that fail to show how the property will be purchased. 

Step 2: Shop For Your Home and Make an Offer

Now that you have your pre-approval letter in your hand, you will forward this letter to your agent. You can now go out and look at homes that fall within your price range. 

Your agent will open doors for you and submit offers on your behalf. Once the offer is submitted, the agent will take care of all the paperwork for you and make sure that everything is done and scheduled promptly. 

Step 3: Get Final Approval

Once the seller has accepted your offer, your agent will submit a copy of the completed paperwork to your bank. Your bank will then bring your mortgage through the necessary underwriting rules that they have established. 

As a part of the approval process, the bank will arrange for an appraisal, title search, and so forth. Once they have completed what needs to get done through their underwriting department, and they are willing to stand behind your loan, they will notify you and your agent about their approval and set a date to close escrow, and give you your keys. 

Step 4: Close On Your Loan

In Georgia, it is required that an attorney handles all closings. Closing on your loan is also known as closing escrow. On this day, you will go to the lawyer’s office with your agent. You will sign a lot of paperwork before you are given your keys. In addition, the lawyer will take your down payment or acknowledge receipt if it was sent electronically.

Mortgage Down Payment: Tips for Saving for a Down Payment

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  • Tips for saving for a downpayment

There are many ways to save for a down payment to buy your home, even while you are renting. Many people chose to rent for a couple of years and save as much money as they can before purchasing a home. The more money you have for your down payment, the lower your mortgage loan, and payment will be. Ultimately, you will save yourself a lot of money in the long run on interest payments. 

Remember, the down payment is not the only cost associated with buying a home. If you are not getting a VA Loan or down payment assistance, you will need to plan for closing costs. Closing costs are the costs associated with paying for title searches, appraisals, insurance, taxes, and other fees when buying a house. These fees can add up quickly.

Plan to save as much as possible

The best down payment on a house is one that is at least 20% of the purchase price. This will definitely give you a good shot at the best rates possible on your mortgage. If your down payment is less than 20% of the purchase price, your mortgage may require that you purchase private mortgage insurance.

Here are some simple ways to maximize the benefits that can be obtained when getting a mortgage to buy your home, especially as a first-time homebuyer.

Determine how much house you can currently afford.

Based on your current income potential, determine how much you would be comfortable paying for a mortgage. As far as mortgages are concerned, you want to try and keep your gross payments less than 30% of your gross income. That means that if you earn $3000 per month before taxes, you want to look at homes where your payment will be less than $1000 per month. That will give you  a good cushion and not overexert yourself.

Create a budget and stick to it as much as possible

One of the first things you want to do when creating a budget is to figure out your fixed costs and variable costs. Your fixed costs could be things like your insurance payments and students loans. Your variable costs include things like electric and gas bills. You want to create a way for you to pay those bills automatically and track their payments. Now you will be able to analyze your payments and see what can be trimmed or eliminated. What is left over is your savings. Based on your savings, you may want to create an account dedicated to your down payment.

Get a roommate or move in with family

It’s nice to have independence, but if you have the ability to live with a trusted friend or family member for as long as is necessary to buy a home, you will save yourself a lot of money. This will allow you to save for your down payment that much faster. Do not go on a vacation or an expensive honeymoon.

If you are really serious about saving for your down payment, you will skip that expensive trip. The average trip for a single individual can cost thousands. If you going to be buying the house with a partner, together you are a stronger force. If you are getting married before buying your home, you could cheap out on the wedding and honeymoon and even come out on top, saving a lot of money for your down payment to buy your dream home.

Pay off higher interest credit cards.

When you go to apply for your mortgage, the mortgage agent will be taking a look at your debt-to-income ratio. They want to know how much of your spending potential is going towards servicing debt. The higher the amount you owe on high interest credit cards, the less you are able to save. Try and pay off those credit cards, but do not close any of your credit card accounts. As a matter of fact, I would encourage you to ask your credit card issuers to increase your credit limit, but do not use it. This will help to boost your ratios in your favor.

Borrow from your retirement plan.

I have a friend who borrowed from his 401 (k) to pay off his mortgage. Some companies allow this. Speak to your HR department and your accountant to see how that may affect your bottom line, but it is definitely an option that could save you a lot of money on interest payments. 

Get a second job.

If you have time in your schedule, consider getting a second job or picking up gigs here and there. After I left college, one of the things I did was advertise myself on Craigslist (back when Craigslist was king). People would call me to help them move. I even had a few clients where I cut their lawn (seriously, cutting lawns in Georgia’s heat is no joke). The profits from these odd jobs should go directly into your down payment savings account.

Consider an up and coming area

If you do not care where you live and your main goal is to just not pay rent, you may want to consider an up and coming area where less buyers are looking. This may give you an opportunity to profit from a potential upswing in prices in the area and gain equity. This will allow you to sell when the prices have appreciated or when your goals have changed. This will allow you to potentially use the equity from that sale to make an even larger down payment in your newly desired neighborhood. 

Look into down payment assistance.

Many states and government agencies offer down payment assistance to qualified buyers. In Georgia, the Georgia Dream program is available to first-time homebuyers. This program basically offers, among other things, a zero percent down payment assistance loan. The Veterans Administration (VA) also offers loans to qualified buyers. This program will allow you to buy a home with 100% of all closing costs financed.

Plan for additional reserve savings

Furthermore, your lender’s underwriting department is going to be looking at all the liquid assets that you are going to have to remain after all your closing costs have been calculated. They want to make sure that you have a couple of months of savings remaining to pay your mortgage in the event you unexpectedly lose your income-producing potential for a short period of time.