From the category archives:

Managing Money

The expenses of buying a home can quickly mount up. Besides working out what your monthly payments will be, there are many other costs of home ownership and they include the down payment and closing costs, not to mention insurances and property tax. Even if it is possible to make the mortgage payments, the up-front expenses of your down payment and closing costs might just be enough to make you think that first home ownership is beyond your reach. Fortunately, that isn’t necessarily so as there is help available.

Local Government Assistance

Some communities offer assistance to low income home buyers. In California, for instance, the Sacramento Housing and Redevelopment Agency has a CalHome First-Time Homebuyer Mortgage Assistance Program, providing help through mortgage and down payment assistance. In Augusta, Georgia, Promised Land Community Development provides help with down payments. Local banks, credit unions and real estate agents can assist you with researching what local programs may be available to you.

State Government Programs

Many states offer assistance to first time low income home buyers. The state of Minnesota, for example, helps by offering lower interest rates and helping with closing costs and down payments. New Hampshire Housing provides fixed rate mortgages to low and moderate income homebuyers. An Internet search using a

phrase such as “low income home buying assistance” followed by your state name can help you find resources within your state. A state-by-state list of assistance programs can also be found at the Department of Housing and Urban Development (HUD) website. The National Council of State Housing Agencies makes it easy to find information on the housing and finance authority within your state.


One way to learn about grants that are available to low income first time home buyers is by attending a Pre-purchase Counseling or Pre-purchase Homebuyer Education Workshop. Besides learning about all of the expenses involved in home ownership, these sessions can be a great resource for learning about financial help in your community. A state by state listing of workshops can be found at the Department of Housing and Urban Development website.

While sort of like a grant because it is money given to you towards the down payment, but not 100 percent a grant because it has to be paid back, another resource to help lower the down payment is a silent second mortgage. This is, essentially, a second home loan, or mortgage, provided by a home assistance buying program. The typical arrangement is that no payments are made on this second mortgage until the home is sold or refinanced at which point it needs to be repaid. Because no payments are made on this second loan, it is essentially a grant to the homebuyer. An example of this is the Second Mortgage Assistance Program used in Anaheim, California.

Federal Assistance

Most federal assistance for low income home buyers, other than HUD, is handled through local agencies. These local assistance agencies apply to the federal government for grants and then distribute the monies locally.

The fact is that there is assistance out there but it will take time and effort to find it. Use local resources such as libraries, real estate agents and bank loan officers. If you have access to a computer (or use one at your local library if you don’t); additional information can be found using an Internet search.

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When you are looking for money, it is often all about how fast can you get the money. However, there are different types of loans and the type often determines how long it takes to be approved. If you are looking for a loan, you want to make sure you know what type to apply for, and what the terms are so that you do not end up damaging your credit.

Student Loans 

If you are looking at needing money so you can continue your education, you will want to apply for student loans. You can find student loans offered by private lenders or by the federal government. Talk to your local bank to see what they are willing to offer you in terms of interest rates and repayment terms because you bank with them. However, the federal government has loans that are greater in amount and they offer the ability to defer the payments until you finish school.

Auto Loans 

When you are preparing to purchase a new vehicle, you will need an auto loan. You can get the loan from the dealership, but they often cost more money. It is best to start looking for auto loans from a bank prior to going to the dealership. It important to not miss a payment because you could lose your vehicle, so make sure the terms are ones you can meet. These loans are also approved within hours so you will know whether you can get the money or not.

Personal Loans 

People who have good credit scores and history shows they make their payments may qualify for personal loans. Personal loans do not have a designated purpose, and many people will use them to consolidate debt to one payment. The interest rates is dependent upon the credit history, as well as whether it is a secured or unsecured loan. With a secured loan, you will promise to pay the amount back or the bank can take your car, house, or some other collateral.

Payday Loans

Payday loans are sometimes viewed as loan sharks. It is extremely important to read the terms before signing the contract as the interest rates can be extremely high. However, these loans are often approved instantaneously. There are payday loans online that will deposit the money into your account within 24 hours, so if you need money fast, this is an option. It is important to make sure you only borrow what you can pay back, because most payday loans require it all back at once.

There are many other types of loans, such as small business loans and mortgage loans. They operate similar as the student loans mentioned above, but they have designated purposes. Most loans can be approved within a day or two, but student loans may take longer if you are going through the federal government. Payday loans are the fastest way to get money, but they also carry the most risk.

Before getting a loan for any instance, make sure that you have explored all of your other options to avoid finding yourself in a messy situation down the line.

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Buying a home can be both difficult and stressful. The day I took the money out of the bank for a down payment on my first house was probably the most nerve wracking day of my life. I can’t think of a time when I have ever written such a large check for anything. Though I was fortunate to live in a mid-west city where real estate was affordable and priced to sell. It didn’t hurt to buy during the recession either. Fast forward several years later and real estate is starting to climb back to the values of the old days. The redeeming factor is that interest rates are still at an all time low and waiting to buy a house could cost you more down the road. If you have been renting the last few years and waiting to pull the trigger on buying a new house then now is the time.

Hands down, the hottest real estate market outside of New York is probably up and down the west coast. Living the California dream is what it’s all about. Unfortunately, it can be quite costly to live in the sunshine state. I saved money and stuck to a strict budget and probably still wouldn’t have the funds to put down on a conventional loan for a piece of property in California. That doesn’t mean it isn’t possible though. Consider a new loan program, the CalPLUS Conventional Loan with Zip Extra. This loan program is designed with the potential homeowner in mind.

So here’s the deal. You get a 30 year fixed conventional mortgage and down payment assistance to boot. Consider that many of you might be holding off on buying a new house because you simply don’t have the funds to put down. Why miss out on favorable interest rates because you don’t have all the money you need right now? The “Zip Extra” portion of this program allows you to receive $6,500 plus up to an additional 3% of the original mortgage that can be used on the down payment or even the closing costs. Trust me, the closing costs and escrow fees can add up to be a significant amount and often times buyers forget that aspect of the mortgage. The best part of these additional funds is that they are interest free and do not require payback until the loan is fully retired. That means if yon don’t move or retire through the life of the loan you could potentially receive an interest free loan for the full 30 year life of the mortgage. That isn’t a bad deal if you ask me. The catch is that you pay a little extra with the initial upfront interest rate, but over a 30 year period it more than pays itself back due to the mortgage interest deduction.

You simply need to make sure you are eligible for the loan. If you want a detailed video illustrating your eligibility you can view it here. The requirements are actually pretty simple and easy to understand. Depending on the area you live within you are restricted to a certain income limit which also depends on the number of people in your household. The restrictions are fairly generous as most counties allow the assistance even with families of four earning over $100k per year. The main requirements is that the property is your first home and that you use the house as your primary residence. Basically, they don’t want to fund loans for people who are trying to utilize the property as rental. You are also required to attend and satisfactorily complete an eligible home buyer counseling class. This is to ensure that you can afford and maintain payments on the mortgage. Lastly, the home price has to be within reason. This also depends on the county that you are buying within, but a general acceptable price is anything below $600k.

As you can see this program has many benefits for potential homeowners who simply can’t afford the 20% down payment on a typical conventional loan. This isn’t necessarily a bad thing, it just offers additional options to someone who wants to take advantage of the favorable interest rates available to them right now. You only need to make sure that after you are provided the down payment assistance you can comfortably afford the monthly mortgage payments without any hardship. For those of you that have been renting a house or apartment this program allows you to purchase a home and start building equity for the future. The recession has long passed up and home prices as well as interest rates are starting to climb. It might sound cliche but this is truly one of the best times to buy a home. So if you have been delaying the inevitable then this is the time to pull the trigger.

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