For many Farragut first time home buyers, one of the biggest sources of stress can be finding the money for the down payment. Luckily, though, for Farragut first time buyers, there are many different ways to get into a Farragut home for sale, regardless of how much money they put down. If you’re considering buying a Farragut home this year, here are a few different ways to find the money for the down payment.
The easiest and most common way buyers find the money for a down payment is from money they’ve saved up. Depending on how much you’ve stashed away in savings, this may be your easiest option. If you’re a little ways out from buying a Farragut home, consider setting aside a certain amount of money each month to use for your down payment.
Get A THDA Grant
The Tennessee Housing Development Agency offers two grant programs for first time buyers that require no money down. One of the programs will pay for your down payment while the other pays for closing costs. These loans come with a slightly higher interest rate, but the grant never has to be paid back. Homeowners are just required to meet credit and income requirements, along with taking a home ownership course.
You can also pull money from your IRA. If you’re single, you can pull up to $10,000 and if you’re married, you can pull up to $20,000 Unfortunately, if you’ve owned a home in the past two years, you’re not allowed to pull money from your IRA. Be sure to talk to your accountant prior to doing this.
The IRS will allow you to pull money from your 401K, if it is paid back within two years. There are certain limitations on this, so be sure to check out the IRS website and talk to your accountant.
USDA Rural Development Loan
Rural Development loans allow you to get in a home with no money down. These loans can be used by any buyer, you don’t have to a first time buyer. The home you select does have to be in a “rural” area. Luckily, though, there are many areas in the greater Knoxville are that qualify for rural housing and are all that “rural.” Be sure to check with your real estate agent or loan officer for qualifying areas.
Get A Gift From A Family Member
In some cases, a family member is willing to gift money for a down payment on a Farragut home. The gift money is truly required to be gift and not a loan. In order to be acceptable by a lender, the money must be accompanied by a gift letter, be sure to talk with your lender about what those requirements are.
Are you thinking about buying a Farragut home this year? Please let us know if there is anyway that Knoxville Home Team can assist you. Rick can be reached at 865-696-9002 or via email at [email protected]. Kati can be reached at [email protected]. Also, be sure to check out our Farragut Home Search Page.