Down payment – Les Couleurs De Luce http://lescouleursdeluce.com/ Mon, 09 May 2022 21:25:01 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://lescouleursdeluce.com/wp-content/uploads/2021/08/icon.png Down payment – Les Couleurs De Luce http://lescouleursdeluce.com/ 32 32 How to get an agricultural loan with no down payment https://lescouleursdeluce.com/how-to-get-an-agricultural-loan-with-no-down-payment/ Mon, 09 May 2022 21:25:01 +0000 https://lescouleursdeluce.com/how-to-get-an-agricultural-loan-with-no-down-payment/

Starting or expanding a farm is an important financial decision, but one that you don’t have to make alone. The US government, commercial lenders, and online banks offer financing options that can keep your farm running and growing. If you’re wondering how to get a farm loan with no money, keep reading.

Can you start a farm with no money?

The short answer is yes. You can get loans or other financing that doesn’t require you to have a down payment to start a farm or expand an existing farm.

It can be particularly difficult to obtain financing as a new farmer. That’s why the US government is trying to help through loans geared towards farmers in their first 10 years (called beginning farmers) who don’t demand incredible credit from their borrowers. These are called farm property loans offered by the Farm Service Agency (FSA), which is part of the United States Department of Agriculture (USDA).

In 2021, the agency distributed $2.1 billion in agricultural loans. Its “Beginning Farmers” loans are secured or direct and can offer up to 100% financing, eliminating your need for a down payment if you qualify.

If you don’t qualify for an FSA loan, you can research other financing options such as lines of credit or equipment financing that don’t require you to have a down payment. We cover these options below.

Ways to get a farm loan with no down payment

You have two main options if you want to get a farm loan with no down payment: get financing that doesn’t require a down payment, or get some farm loans through the FSA.

Many online lenders do not require a down payment for their financing options, such as lines of credit or equipment financing. You may not be able to borrow enough to start a new farm with these options, but you can fill in the gaps or expand your operations.

On the other hand, there are three types of FSA farm property direct loans, and two of them do not require a down payment: the ‘normal’ direct loan and the joint finance loan, which we discuss in the next section.

The FSA also offers a down payment loan, but it requires you to pay 5% of the purchase price for the loan. The agency also offers loans that target underserved communities, urban farmers, and organic farmers, as well as microloans for anyone who needs less finance. Contact your state Beginning Farmers and Ranchers Coordinator to the USDA to learn how to get started and find the right loan officer.

Best Farm Loan Financing Options

You don’t need a great credit score or decades of farming experience to qualify for farm financing. Here are some of the best options when looking for a farm loan.

Equipment Financing by LendSpark

What it is

If you are looking to expand your farm operations, equipment financing is a great choice. With an equipment loan, you can borrow money to buy new equipment you need to improve your farming operations, with no down payment.

how much can you borrow

Up to $2 million

What it costs

6% to 35% APR

Who is it best for

This loan is best suited for someone who needs money to purchase one or more machines to improve your farm efficiency or increase production. For example, if you need a new tractor for your farming business, you can use equipment financing to buy it.

Kabbage line of credit

What it is

A business line of credit allows the borrower to withdraw cash as needed up to a predetermined limit. You can then pay it back and borrow more. And it’s fast – with Kabbage, you can have funds in your bank account in as little as three days.

how much can you borrow

$2,000 to $250,000

What it costs

9% to 36% APR

Who is it best for

Because you can borrow less than other farm loan options, a line of credit is best suited for someone who already operates an existing farm but needs to expand or improve their operations. Interest rates may be higher than for other loans.

Farm Property Loan (FSA)

What it is

Congress sets aside money in the USDA budget for this loan program, so the FSA funds these loans directly through the USDA. A farm property loan can be used for many farm-specific purposes, including buying a family farm, expanding a farm, or improving the operational efficiency of your farm and can lend up to 100% of your financing needs.

how much can you borrow

Up to $600,000

What it costs

3.375% APR*

Who is it best for

This loan is fantastic for someone who is a beginning farmer and wants to start a farm but doesn’t have the credit history or the money to run it. If you qualify for this loan, you will likely walk away with low interest rates and good terms.

*Rates as of May 4, 2022

Farm Ownership Joint Finance Loan (FSA)

What it is

Think of this loan as a partnership – half is provided by the FSA and the other half is provided by a commercial lender. It may or may not be an FSA-backed loan, and it may offer great interest rates if you qualify.

how much can you borrow

$2,000 to $250,000

What it costs

2% less than the direct agricultural ownership rate but not less than 2.5%

Who is it best for

Anyone looking to combine an FSA loan with the offerings of a commercial lender.

How to qualify for a farm loan with no down payment

For qualify for an FSA farm loanyou must meet the eligibility criteria, including:

  • Have at least three years of farm management experience, education or training
  • Be authorized to live and work in the United States
  • Have an acceptable credit rating
  • Being unable to obtain a loan at reasonable rates from another lender
  • Have no other USDA debt that has been canceled in the past or owe any money to the federal government

Also remember that you may be able to get a agricultural credit on your taxes.

Which bank is best for agricultural loans?

The answer to this question is annoying: it depends. If you’re looking for an operating loan to help you manage your cash flow with easy-to-obtain qualifications, a fast loan application process with no closing costs, and quick funding, an online lender may be the best for you. . Even if you have to pay higher interest, they may be able to provide you with the maximum amount of your loan quickly.

On the other hand, if you need sufficient financing at a good rate and are willing to spend more time and effort to obtain it, you may consider a US government loan. The FSA can offer eligible applicants favorable interest rates for large amounts of loan funds with good repayment terms.

What type of loan can I get for a farm?

There are several types of loans that you can use together or separately to start a farm or to expand your farming business. Here are some options:

  • Government agricultural loan programs
  • Commercial real estate or land loans
  • Lines of credit
  • Equipment financing
  • Crop financing
  • Livestock financing

The type of financing you need depends on factors such as the size of your farm and the appraised value of your farm.

Is it difficult to get a loan to start a farm?

The federal government is working hard to lower the barriers to entry for new farmers. If you don’t qualify for a direct farm loan from the FSA, you can try a co-funding loan in partnership with a commercial lender. Alternatively, online lenders may be able to fill financing gaps with products such as lines of credit or equipment financing – and you can find these and other small business loans on the market. of Nav. Just make sure you understand all the fees and conditions of any loan before signing on the dotted line.

This article was originally written on May 9, 2022.

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New California program lets first-time homebuyers borrow down payment at 0% interest https://lescouleursdeluce.com/new-california-program-lets-first-time-homebuyers-borrow-down-payment-at-0-interest/ Tue, 03 May 2022 23:35:49 +0000 https://lescouleursdeluce.com/new-california-program-lets-first-time-homebuyers-borrow-down-payment-at-0-interest/

California state officials launched a new program in April that allows first-time home buyers to borrow a down payment at a 0% interest rate.

The program, the Reimbursable equity loanoffers forgivable loans to homebuyers up to 10% of the purchase price of the home.

“We must use every tool in our toolbox to tackle the housing affordability crisis head-on,” Gov. Gavin Newsom said in an April. statement announcement of the program.

And the biggest advantage? If the buyer stays in the home for five years, they won’t have to repay the junior loan, according to the California Housing Finance Agency.

Borrowers, however, may have to repay part of the loan if they stay in the home for less than five years, officials said.

KRON We are broadcasting live now

The loan has a 0% interest rate, according to the California Housing Finance Agency.

“CalHFA first mortgage interest rates will vary based on your financial situation, lender fees and other factors. Interest rates may also change daily. We recommend that you check with a Privileged Loan Officer receive a precise estimate for this program”, the Housing Finance Agency website states.

State officials said the program’s goal is to give first-time home buyers a head start with immediate equity, which will help Californians build and pass on intergenerational wealth.

The aid comes as median California home prices hit new highs and interest rates hit their highest levels in more than two years.

According to California Association of Realtors.

“Owning a home represents belonging, stability and has long been recognized as one of the best ways to build wealth, but for far too many Californians, the dream of owning a home simply remains out of reach,” mentioned Secretary of the Agency for Business, Consumer Services and Housing Lourdes Castro Ramírez.

The loan is available to Californians whose income is less than 80% of the area median income in the county where the property is located.

This means that the income limit will be different depending on where people want to buy a house.

So, for example, a family in Sacramento can earn up to $72,700 and qualify for the loan, while in Santa Clara County the limit is $118,960.

In Los Angeles County, people wouldn’t need to earn more than $68,880 to qualify for the program, according to the Fannie Mae Search Tool.

The loan can be used for down payment or closing costs, officials said.

Other Borrower Requirements

  • Be a first-time buyer
  • Use the property as a principal residence
  • Complete homebuyer education counseling and earn a certificate of completion through an eligible homebuyer counseling organization.

Do you have any requirements for the type of home you need a loan for?

It must be a single-unit, single-family residence. (This includes approved condominiums/PUDs.)

How to register

Families who think they are eligible and wish to apply can click on Find a loan officer and contact one in your area.

When you contact the loan officer, you will need these documents at hand to answer the questions:

  • payslips
  • Bank statements
  • Employment history
  • Previous tax returns

You will find more information about the program here.

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Shared equity platform point to launch installment product https://lescouleursdeluce.com/shared-equity-platform-point-to-launch-installment-product/ Tue, 03 May 2022 22:45:41 +0000 https://lescouleursdeluce.com/shared-equity-platform-point-to-launch-installment-product/

The new offer will provide up to 15% of a home’s purchase price to be paid for a down payment, helping buyers qualify for more expensive homes and avoid private mortgage insurance.

Shared Equity Platform Indicate says it will use $115 million in Series C funding to expand its product line to include a down payment product for homebuyers and to enter new markets beyond its current 16-state footprint .

Founded in 2015, Palo Alto, California’s flagship Home Equity Investment (HEI) product allows homeowners to leverage up to $500,000 in home equity by selling a share of their home’s future price appreciation to investors, paying a processing fee of 3-5%. , plus the cost of an independent appraisal.

A new product aimed at homebuyers, Seedwill provide up to 15% of the purchase price of a home for a down payment, helping buyers qualify for more expensive homes and avoid private mortgage insurance.

With either product, homeowners can redeem their equity within 30 years without paying a prepayment penalty, usually through a refinance, home loan, or sale. The company also offers a home equity line of credit (HELOC) in California.

The Series C fundraising, which brings total equity funding to date to over $170 million, was led by WestCap, with participation from existing investors Andreessen Horowitz, Ribbit Capital, Redwood Trust, Atalaya Capital Management and DAG Ventures. New investors included Deer Park Road Management, The Palisades Group and Alpaca VC.

Eddie Lim

“We have created strong momentum at Point and we welcome this vote of confidence from leading equity investors in our continued success, Point co-founder and CEO Eddie Lim said in a statement. statement. “We expect this additional capital to accelerate our growth as we help cash-strapped homeowners and homebuyers establish financial stability and realize their financial dreams.”

WestCap is also a investor in single-family residential rental asset manager Avenue One, sustainable home improvement platform GoodLeap and short-term rental platform Sonder.

Point is currently available in Washington, DC and select markets in Arizona, California, Colorado, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Virginia, and Washington.

With its new funding, the company plans to expand into a total of 28 markets over the next year.

Last week, equity startup HomePace announced that it had secured $7 million in Series A funding led by homebuilder Lennar’s venture capital arm, LENx, which will allow the company to launch a home buying solution to help buyers double their down payments.

Rising interest rates are expected to dampen house price appreciation in the months and years to come. In an April 19 forecast, economists at Fannie Mae said they expected house price appreciation to slow from a record 19.8% in the first quarter of this year to 3.2% by the last three months of 2023.

That’s not necessarily a problem for stock companies, HomePace CIO Jeboah “Bo” Joerg told Inman.

“The general consensus is that cooling house prices are probably healthy for the market,” Joerg said. “If you’re in it for the long haul, it’s probably better to have a higher slow grind than for us to keep accelerating higher” until prices crash.

Homebuyers looking for help making a down payment can also use tools provided by an Atlanta-based company, Down payment resourcewhich tracks programs offered by state housing finance authorities and other providers.

Down Payment Resource integrates data on program benefits and eligibility criteria with MLSs, lenders, agents, and home search sites like Zillow.

Get Inman’s Extra Credit newsletter delivered straight to your inbox. A weekly roundup of all the biggest news from the world of mortgages and closings delivered every Wednesday. Click here to subscribe.

Email Matt Carter

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How much do you need for a down payment on a house? https://lescouleursdeluce.com/how-much-do-you-need-for-a-down-payment-on-a-house/ Tue, 03 May 2022 15:43:00 +0000 https://lescouleursdeluce.com/how-much-do-you-need-for-a-down-payment-on-a-house/
  • The money you pay to buy a home is your down payment.
  • You might need as little as 3% upfront for a conventional mortgage.
  • Some government-backed mortgages, including VA and USDA loans, require no down payment.

the


deposit

is a well-known barrier to home ownership, but many potential buyers aren’t sure how much money they’ll need to cover this cost. According to Urban Institute39% of renters believe they will need to put down more than 20% to buy a home.

In reality, most buyers put less than that. Repeat homebuyers typically pay 17%, while first-time homebuyers pay just 7%. National Association of Realtors said.

A small down payment can make home ownership more feasible. How little can you deposit? It depends on the type of mortgage you get.

What is a down payment?

A down payment is the part of the price of a house that you pay with your own money. Your deposit is due at closing, when ownership of the home officially transfers to you.

For example, if you buy a house for $200,000, you might decide to put down a down payment of $20,000, which is 10% of the purchase price. You will then take out a mortgage for the remaining $180,000.

The down payment you will need for each type of mortgage

There are two basic types of mortgages: conventional and government backed.

A conventional mortgage is not insured or guaranteed by any government agency. A government guaranteed mortgage is guaranteed by a federal agency that compensates your lender if you fail to make the mortgage payments. The Federal Housing Administration, Department of Veterans Affairs, and Department of Agriculture are all government agencies that guarantee mortgages.

The minimum down payment required depends on whether you choose a conventional or government-guaranteed loan, and the sub-category of loan you obtain.

Conventional mortgages

There are two types of conventional mortgages:

  • Compliant loan. This is a mortgage that falls within the conforming loan limit set by the Federal Housing Finance Agency and meets the criteria for purchase by Fannie Mae or Freddie Mac. In 2022, the conforming loan limit is just under $650,000 in most parts of the United States. Down payments on these mortgages can be as low as 3% of the purchase price of the home, although your lender may require you to put down 5% or more if you are not a first-time buyer or low-income buyer. .
  • Non-compliant loan. When a mortgage exceeds the FHFA loan limits or does not meet the other criteria to be purchased by Fannie Mae or Freddie Mac, it is called a non-conforming mortgage. The most common type of nonconforming mortgage is the jumbo loan. Jumbo loans come with higher limits that vary by lender, sometimes up to $2 or $3 million. These mortgages generally require larger down payments, often 10% or 20%.

Government guaranteed mortgages

There are three types of government-backed mortgages:

  • FHA loan. This loan has more lenient conditions than a conventional mortgage. You’ll need a 3.5% down payment if you have a credit score of 580 or higher, and a 10% down payment with a score between 500 and 579.
  • VA loan. This mortgage is for military families. You don’t need a down payment for a VA loan.
  • USDA loan. This loan for low to middle income buyers in rural and suburban areas requires no down payment.

3 reasons to save for a bigger down payment

If you have the minimum down payment required to buy a home, you might decide you’re ready to get the ball rolling. But you might also want to consider saving even more for a down payment. Here are some benefits of paying more up front:

  • Lower interest rates. Lenders reward a higher down payment with a lower interest rate. It could save you tens of thousands of dollars over the years.
  • Lower monthly payments. When you take out a 30-year mortgage, for example, the amount you borrow is spread over 30 years in monthly installments. The less you borrow, the less money you will pay each month.
  • Less or no mortgage insurance. If you put 20% down on a conventional mortgage, you won’t have to pay private mortgage insurance (PMI). PMI typically costs between $30 and $70 per month for every $100,000 borrowed, based on Freddie Mac. Other types of mortgages require different types of insurance that cost a percentage of your loan, so the less you borrow, the less insurance you will pay.

Having a larger down payment can be very helpful if you are looking to save money in the long run. But buying early with a small down payment also has advantages. It just depends on what makes the most sense to you.

mortgage calculator

Use our free


mortgage calculator

to see how a larger or smaller down payment will affect your monthly payments.

mortgage calculator

$1,161
Your estimated monthly payment

  • pay one 25% a higher down payment would save you $8,916.08 on interest charges
  • Lower the interest rate by 1% would save you $51,562.03
  • Pay an extra fee $500 each month would reduce the term of the loan by 146 month

You’ll also see how the amount you deposit will affect your spending over the life of your mortgage.

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Philly relaunches down payment assistance program for first-time home buyers https://lescouleursdeluce.com/philly-relaunches-down-payment-assistance-program-for-first-time-home-buyers/ Mon, 02 May 2022 17:32:00 +0000 https://lescouleursdeluce.com/philly-relaunches-down-payment-assistance-program-for-first-time-home-buyers/

Philly relaunches down payment assistance program for first-time home buyers

May 2, 2022

The city’s down payment assistance program, Philly First Home, reopened today, according to an announcement from the Division of Housing and Community Development (DHCD). The program provides up to $10,000 (or 6% of the purchase price, whichever is less) in assistance to first-time homebuyers or those who have not owned a home for at least three years. The aid recipient must also:

– Buy a house in Philadelphia
– Have a household income equal to or less than 100% of the median income of the area (AMI)
– Accomplish housing advice in a housing advice agency financed by the DHCD.

The Philly First Home program was designed to help make home ownership more accessible. Program funds may be used for down payment and/or closing costs.

The first iteration of the program launched in 2019 and was a huge success. More than $24 million in assistance was provided to new owners until the program closed in September 2020 after funds ran out. The program provided 2,700 grants and the majority of participants were black (58%). About 26% (the second largest group of participants) were Hispanic. Fifty percent of homes were purchased for less than $175,000, and the average grant amount was $8,983.

More information about the program is available here.

Interested future homeowners can contact DHCD-funded housing advice agencies from today. To learn more, please go here.

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What is a down payment? And how much should I put? https://lescouleursdeluce.com/what-is-a-down-payment-and-how-much-should-i-put/ Sun, 01 May 2022 12:30:00 +0000 https://lescouleursdeluce.com/what-is-a-down-payment-and-how-much-should-i-put/

This is part of our car buyer’s glossary series which details all the terms you need to know whether you’re buying a new or used car from a dealership.

A down payment is the amount you pay up front when you finance a new vehicle. To the right? What more is there?

Well, a lot. But you know the basics. The deposit is in effect the money you pay at the time of purchase. The down payment is determined when you apply for financing. There is usually a minimum down payment for a given loan, although it’s usually no problem to put down more money than that.

Generally, you want to pay a deposit equal to 20% of the value of the vehicle.

20%? It’s a lot! I don’t have that kind of money lying around.

We hear you. That’s a lot of money. But depositing 20% ​​has a lot of advantages. Remember, the second you drive the car off the lot, it’s a used car – and its value drops instantly. And it keeps dropping the more miles you put into it. It’s just a fact of life when buying a car.

But depositing money “neutralizes” this loss of value. If something wild happens – like a meteor hits the dealership just as you sing the paperwork – you won’t have negative equity in the car. This means you won’t owe more than it’s worth.

A meteor, huh? Well, I’m not worried about that.

It was a ridiculous example, but it’s a dry subject and spicing it up a little helps. To the right?

[Sigh]

Alright, back to the subject. Putting more in advance will save you a lot of interest down the road. Whatever is included in your loan, you pay interest. And if your credit score is good but not great, putting more money aside will help you get a better loan. Remember that the less the bank has to lend to you, the less risk there is for the lender. Lenders hate risk.

This all sounds good, but have you seen my bank account?

Well, if you need less money, you can protect yourself to some extent with gap insurance. For some buyers, this is a good decision.
You can read more about gap insurance here.

And there is also your exchange! This counts as part of your down payment. Make sure you know the fair trade-in value of your car before you go to the dealership. Trade-in values ​​are usually much lower than what you could get selling the car yourself. The dealer must make a profit, after all. But unless your trade is a total heap, it will reduce what you need to deposit.

Do I have to remove all fries from under the seat before the dealership sees my trade-in?

Yeah. Go do that. And also you make us hungry for fries.

Sorry? (Not sorry.)

It must be lunch time. Either way, would you like to put zero money on your next car?

Hey, what’s up? You told me to do 20% all the time here!

You are right. Zero percent offers are really meant to entice people. Once there, they might discover that they are not eligible for such an agreement. You really need great credit to do that. And also, it’s not great for you from a financial standpoint for all the reasons we’ve mentioned above. It gets expensive over time, you won’t have any equity in the car, and you’re probably not even going to get it. Remember that just because you can do something doesn’t mean you should. Like getting fries instead of a salad.

OK, enough with the food analogies.

Sure thing. We’re pretty much done on the subject. While you don’t have to put down 20% on every loan under all circumstances, it’s a good rule of thumb and a good starting point for thinking about the whys and wherefores of down payments. Good luck with your purchase!

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WSFS Bank Pledges $3 Million Down Payment Grant Program to Help Eligible Homebuyers Get the Financial Support They Need https://lescouleursdeluce.com/wsfs-bank-pledges-3-million-down-payment-grant-program-to-help-eligible-homebuyers-get-the-financial-support-they-need/ Wed, 27 Apr 2022 14:33:18 +0000 https://lescouleursdeluce.com/wsfs-bank-pledges-3-million-down-payment-grant-program-to-help-eligible-homebuyers-get-the-financial-support-they-need/

Announcement submitted by the community

WSFS Bank, the principal subsidiary of WSFS Financial Corporation (Nasdaq: WSFS), recently announced the launch of the WSFS Installment Grant Program, which will provide grants of up to $10,000, totaling $3 million over the next three years. , to individuals and families in need of financial assistance to realize their dream of buying a home.

The grants are designed to provide additional access to down payment and closing cost funds for primary residence purchases for eligible borrowers in eligible census tracts.

“This program is an opportunity for borrowers who would otherwise struggle to afford some of the initial expenses of buying a home to now cover some of those costs,” said Ron Dutton, senior vice president, director of community reinvestment. for WSFS Bank. “Combined with WSFS initiatives such as the Neighborhood Opportunity Program, as well as government-funded resources, we are committed to helping low-to-moderate income buyers in eligible geographies use these grants to find their dream home. .”

To be eligible for a WSFS Down Payment Grant, total household income must be less than or equal to 80% of Area Median Income (AMI) and property must be located in Majority-Minority Census Tracts (MMCTs) in the following Greater Philadelphia counties. and Delaware region:

  • Delaware – Kent, New Castle and Sussex
  • New Jersey – Burlington and Camden
  • Pennsylvania – Bucks, Chester, Delaware, Montgomery and Philadelphia

WSFS down payment grant funds do not require repayment and can be combined with other down payment assistance programs such as the First Front Door Down Payment Assistance Program, Fannie Mae and Freddie Mortgage Programs Mac and other state, county and employer subsidized housing. initiatives.

The WSFS Neighborhood Opportunity program can also be combined with a down payment grant and offers qualified homebuyers assistance with low down payment options, competitive rates and, in some cases, no private mortgage insurance for no only to make the initial home purchase more affordable, but to keep monthly payments more manageable.

For more information, visit https://www.wsfsbank.com/borrowing/mortgages/affordable-mortgage

To speak with a WSFS representative about the Down Payment Grant Program, call 855.901.9737 or call 888.456.0146 to discuss the Neighborhood Opportunity Program.


About WSFS Financial Company

WSFS Financial Corporation is a multi-billion dollar financial services company.

Its main subsidiary, WSFS Bank, is the oldest and largest locally managed bank and trust company, headquartered in Delaware and the Greater Philadelphia area.

As of December 31, 2021, WSFS Financial Corporation had $15.8 billion in assets on its balance sheet and $34.6 billion in assets under management and administration.

WSFS operates from 112 offices, 89 of which are banking offices, located in Pennsylvania (52), Delaware (42), New Jersey (16), Virginia (1) and Nevada (1) and provides comprehensive financial services including commercial banking, retail banking, cash management and fiduciary and wealth management.

Other subsidiaries or divisions include Arrow Land Transfer, Cash Connect®, Cypress Capital Management, LLC, Christiana Trust Company of Delaware®, NewLane Finance®, Powdermill® Financial Solutions, West Capital Management®, WSFS Institutional Services®, WSFS Mortgage® and WSFS Wealth® investments.

Serving the Greater Delaware Valley since 1832, WSFS Bank is one of the ten oldest banks in the United States continuously operating under the same name.

For more information, please visit www.wsfsbank.com.

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What is the right down payment size when buying a home? https://lescouleursdeluce.com/what-is-the-right-down-payment-size-when-buying-a-home/ Mon, 25 Apr 2022 12:00:29 +0000 https://lescouleursdeluce.com/what-is-the-right-down-payment-size-when-buying-a-home/

Image source: Getty Images

Making the right decision about your down payment is crucial.


Key points

  • You will probably need to put some money aside when buying a house.
  • Making a deposit of less than 20% may mean paying additional fees.
  • There are several factors you need to consider when deciding on your down payment amount.

Buying a home usually requires both putting some money aside and getting a mortgage to cover the rest of the cost. But how much down payment should you make when buying your property?

It may depend on your situation, so here are some key things to consider in order to make the choice that’s right for you.

How much does housing cost in your area?

Ideally, it’s best to put down a 20% deposit if you can afford it. A 20% down payment is the “gold standard” preferred by lenders, as it is a large enough sum of money that lenders are unlikely to incur uncompensated losses if they were to exclude.

If you can put down a 20% down payment, you can avoid being forced by a lender to pay for mortgage insurance that protects them. Mortgage insurance is an additional cost for which you are responsible, but you derive no direct benefit from it. More lenders will also be willing to lend you a loan when you put down 20%, and your rate will often be more competitive because the higher amount you deposit reduces the risk for lenders.

However, you should consider the cost of housing where you live to assess the feasibility of a 20% down payment. If you live in an area where the typical home costs $200,000 and you’re looking to spend around the average, then a 20% down payment might not be a huge burden since you’ll only need around $40,000. But if a starter home costs $900,000, saving a down payment of $180,000 is much more of a burden.

What type of loan are you interested in?

It’s usually possible to put as little as 3% down on a home — or, in some cases, put nothing down at all if you qualify for special loans like VA or USDA loans. However, loans with lower down payments may incur higher upfront fees and interest rates.

You should research different types of loans, the down payment requirements for each, and the fees you would pay for each type of loan. This will help you determine your down payment amount.

How long would it take you to save a deposit?

Once you have an idea of ​​the amount of a down payment based on housing costs and the minimum down payment required for the loans you are interested in, you can estimate how long it would take you to save down payments of different sizes.

If it would only take you a year or two to save up to 20%, this should ideally be your goal, as it will allow you to get an affordable loan while buying a home in a reasonable time frame.

But if it takes you many years to save 20% – and if you’re otherwise in good financial shape to buy – then you might want to make a smaller down payment so you can get into a home quicker and get started. build equity and benefit from property appreciation.

By thinking about these questions, you can decide how much down payment is right for you and make the best choice for buying a home.

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The City launches a down payment assistance program for the purchase of a first home https://lescouleursdeluce.com/the-city-launches-a-down-payment-assistance-program-for-the-purchase-of-a-first-home/ Fri, 22 Apr 2022 12:01:38 +0000 https://lescouleursdeluce.com/the-city-launches-a-down-payment-assistance-program-for-the-purchase-of-a-first-home/

NEW ROCHELLE, NY – Are you a New Rochelle resident interested in buying your first home and might be interested in help with that down payment?

First-time home buyers in New Rochelle can now get help through a new down payment assistance program recently approved by City Council. The city will begin offering eligible home buyers up to 19% of the price of a single-family home, provided buyers can match at least 1% of their own funds and meet additional criteria.

“Expanding affordable housing and home ownership opportunities is central to New Rochelle’s vision of a growing diverse city where people from all walks of life are welcomed and provide pathways to put down roots in the community. community and move forward,” said City Manager Charles Strome. “The First-Time Home Buyer Down Payment Assistance Program is another example of the City’s commitment to residents and why New Rochelle, with its rich culture, vibrant downtown and its beautiful neighborhoods, is such an attractive place to live.

The First-time Home Buyer‘s Down Payment Assistance Program is designed for potential buyers of single-family homes, co-ops and condos valued up to $494,000. Eligible income is as follows:

  • people earning an average of $71,400
  • couples earning an average of $81,600
  • families of 3 earning an average of $91,800
  • families of 4 earning an average of $102,000
  • families of 5 earning an average of $110,150
  • families of 6 earning an average of $118,300

Applicants must purchase and occupy the home as their primary residence for five years, after which zero-rate loans will be forgiven.

The initiative was launched this month and will help make the American dream of homeownership a reality for local low- and middle-income households and will also address the racial wealth gap faced by communities in across the country.

Home ownership is widely considered the number one asset to accumulating wealth for most Americans. According to a recently released report by the National Association of Realtors, home ownership across the country continues to grow at its highest level since the Great Recession. However, in New York, black ownership (35%) and Hispanic ownership (28%) are both significantly lower than white ownership (66%).

“Our city is only as strong as the people who call it home and that’s why New Rochelle prioritizes innovative initiatives like this that are elevated through inclusivity,” the commissioner said at the development Adam Salgado. “We are proud of all of our residents and have an ongoing, long-term commitment to the people and diversity that make up New Rochelle.”

New Rochelle is launching a comprehensive outreach campaign to engage the community and spread news of the new program, including a dedicated website and social media campaign, in addition to town hall-style forums and community events for those who wish find out more and apply.

A forum for industry professionals will be held April 26 at City Hall and another for the general public will be held May 11 at the New Rochelle Public Library.

Funding for the program came from a combination of local and federal money through the US Department of Housing and Urban Development’s HOME program and the New Rochelle Affordable Housing Fund.

Additional eligibility for applicants are:

  • a resident of New Rochelle
  • a first-time buyer (cannot have owned a home in the 3 years preceding the purchase of a residence with HOME financing); requirement waived for US military veterans who have a DD-214, verifying honorable service.
  • complete a mortgage counseling/education workshop at a HUD-certified nonprofit housing agency.
  • buy a lead-free paint house in New Rochelle; a lead-based paint inspection will be performed for all homes built before 1978.
  • occupy the purchased property as your principal residence
  • pass a Housing Quality Standards Inspection before receiving HOME funding.
  • must not enter into a contract of sale before having obtained a buyer’s certificate.
  • pay, out of own funds, at least one percent of the purchase price on account.
  • have a documented minimum annual family income of $40,000 and be able to obtain a mortgage

Applications can be obtained from the New Rochelle website website.

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Saving for a down payment? Here’s an overview of accounts that can help you – National https://lescouleursdeluce.com/saving-for-a-down-payment-heres-an-overview-of-accounts-that-can-help-you-national/ Thu, 21 Apr 2022 18:43:34 +0000 https://lescouleursdeluce.com/saving-for-a-down-payment-heres-an-overview-of-accounts-that-can-help-you-national/

TFSA. RRSP. And now the FHSAs.

The alphabet soup of investment savings accounts for Canadians looking to buy their first home can seem daunting. Experts say each has its benefits — and limitations.

The first Tax-Free Home Savings Account (FHSA), unveiled by the federal government in its budget earlier this month, offers a new way for aspiring homeowners to put down a down payment on their first property.

Available next year, it aims to combine the advantages of the existing tax-free savings account (TFSA) and the registered retirement savings plan (RRSP).

Contributions to an FHSA will be tax deductible, similar to an RRSP. Withdrawals from an FHSA, including capital gains, to buy a home will not be taxable – like a tax-free savings account.

“It’s almost like a hybrid between the two, but on steroids,” said Tim Cestnick, tax and personal finance expert and CEO of Our Family Office Inc.

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Read more:

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First-time home buyers can deposit up to $8,000 into this savings account per year — unused contribution room cannot be carried over to the next year — with a lifetime cap of $40,000.

“The first home savings account will be the best plan for the majority of people,” Cestnick said.

In contrast, the RRSP Home Buyers’ Plan allows first-time buyers to put up a maximum of $35,000 for a down payment, and the withdrawal must be “paid back” within 15 years.

“You really have nothing to lose by creating one of these first housing savings accounts. Either you’re going to buy a house and you’re going to benefit from the tax-free withdrawal and the deduction you got when you invested the money – and the growth over the years – or you’re not going to use it and you go transfer it to your RRSP tax-free,” Cestnick said.

This last allowance also goes the other way, as RRSP holders can transfer money to FHSA without being taxed on the withdrawal.

While $40,000 is the maximum contribution for FHSA, this investment will likely gain in value. The account can store everything from stocks and bonds to cash and exchange-traded funds.

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Even if that $40,000 doubles in value, however, the boosted buying power may not be enough to compete in white-hot housing markets like Vancouver or Toronto. Also, since contributors can only add $8,000 per year, an FHSA would not significantly fill the wallet for several years.


Click to play the video:







Federal budget aims to help first-time homebuyers save for down payment


Federal budget aims to help first-time home buyers save for the down payment – ​​April 8, 2022

But it might be of interest to young Canadians who aren’t yet planning to hit the market.

“Someone who is even 18 or 19 and starts a construction job or something that gets them right into the job market…these Canadians can actually save more money because they live maybe still being with mom and dad, they could rent for low cost,” said Leah Zlatkin, mortgage expert at LowestRates.ca.

The first real estate account also makes sense for properties that are well below the average home price in Metro Vancouver or the Greater Toronto Area _ $1.36 million and $1.30 million respectively in March _ says Sung Lee, mortgage expert at Ratesdotca.

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“Where the value of homes typically exceeds $1 million, it will be difficult,” he said, noting that they require a 20% down payment.

Read more:

Some Canadians struggle to enter housing market as costs rise: ‘There’s nothing we can do’

“But for someone looking at a property of, say, $650,000 or less, it would benefit them because you basically have to deposit 5% on the first $500,000 ($25,000) and then 10% on the balance ( $15,000). ). So if you take $40,000 – the maximum amount you could put into this account – that would equate to a purchase price of $650,000.

The FHSA and RRSP cannot be used simultaneously, he noted.

For current owners looking to increase their size, neither FHSA nor RRSP apply. Cestnick says they should consider the more flexible and versatile Tax-Free Savings Account, which allows annual contributions of up to $6,000, with carryover of unused margin.

An alternative route is to renovate the residence to increase its value, especially since the gains on the sale are tax-exempt, he noted.


Click to play video: 'No 'silver bullet' when it comes to solving Canada's housing crisis, says Freeland'







No ‘silver bullet’ to solve Canada’s housing crisis, says Freeland


No ‘silver bullet’ to solve Canada’s housing crisis, says Freeland – April 13, 2022

The Tax-Free Savings Account may also come into play for those with more than $8,000 to invest, with the fallout from that FHSA cap flowing into a TFSA.

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“It’s a matter of priorities. If your longer-term goal is to make sure I have that retirement nest egg, you’re going to put your extra savings into an RRSP. But if your short-term goal is to get into your first home, you want to take advantage of the new savings account,” Lee said.

Potential buyers should resist any urge to pour money into these tax shelters by going into debt, Zlatkin noted.

“Maybe you actually want to pay those credit card bills, try to spend a little less on consumer goods and restaurants…and set a family budget,” she said.

“Then think about the houses.”

© 2022 The Canadian Press

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