Free “grant” money for your down payment?

You may have ben hearing recently about a few lenders’ new loan programs that give you a “Grant” for a down payment. They advertise 3% or 5% “cash” that you can use for your down payment or closing costs.

 

Ever heard that saying, “If it sounds too good to be true, it probably isn’t?"

Although there are limited government programs from time to time that have provided real benefits to first time home buyers, many offerings are just marketing smoke and mirrors. What these lenders do is increase the interest rate higher than the market rate to provide this “Grant”. You, as the buyer, end up paying far more than your “grant” benefit in added interest over the term of the loan, many times paying up to 3 times the original grant amount in extra fees and interest. Since the rate is also above market, your house payment will be higher, and you will qualify for a lower amount than a regular FHA or Conventional loan.

Before you buy, research your options and calculate the real cost of home ownership—many times it may be a more prudent decision to just save up a modest down payment and get a regular Conventional or FHA loan.  Be informed in your financial decisions, as a home purchase will most likely be the largest investment you will make in your lifetime.

We at Mortgage First want to guide you to the right loan for the long term and help you make financially sound decisions. Our goal is to guide you to your best option for the long term and refer your friends and family to us with the confidence that we will point them in the right direction. That is how we have done business in Salem for the last 25 years, and will continue to do so for many more!

 Keywords: NHF grant, down payment grant, CHF grant