my broker said he found a place to give me my 5% down payment for free ($10,000). has anybody heard of Prefered Program and this source of down payment?(www. preferredprogram.org) If so, is it a too good to be true type of deal?
its not too good to be true, happens all the time… well the only too good to be true part is its not free money! the seller pays them, plus a fee, and then they basically pay the same amount of money to you.
if the porperty is at least $X below the appraised value, its really no problem, just inflate the selling price by $X, the seller pays this non-profit company $X+fee, next non-profit pays you $X at closing, and then $X becomes your down payment, most sellers are happy to pay the small fee.
either your broker is leading you on about the “free” bit, or he has no idea whats going on, or you misunderstood him. if its one of the first 2, consider finding an honest broker who knows what he/she is doing.
Ok, the seller wants $200,000 for this complex which is fine. I want my loan to be $190,000. The way i am taking it, is that the seller or me will pay a $300 fee, and we will get $10,000 for my down payment. Is this correct? Does the seller have to pay the $10,000 back? If so, then this is not going to work, and is too good to be true.
If I use this type of program for my downpayment, can I still inflate the price of the property to also cover my closing cost? Please respond ASAP, I am trying to get a deal with no money out of my pocket.
WELL IT IS NOT FOR FREE FOR THE SELLER IT IS A SELLER PAID GRANT TYPE OF PROGRAM AND THAT IS WHAT I HAVE BEEN TELLING ALOT OF PEOPLE EVEN IF YOU CAN NOT GET A 100% LOAN YOU CAN GET A SELLER PAID GRANT BY INCREASING THE COST AND MAKING IT HAPPEN.
ok, thats what i thought. It would be a good deal if it is for a house that your living in, but as far as doing it for the investment property, then it doesnt work, because im financing too much and will only be making about 300 dollars opposed to the $500 if the loan was decreased by $10,000.
No
Not nessisarily
You can get a seller paid grant for investment homes to.
It is a great way of getting into a property for little money without using seller financing if the seller is willing to give up some of the equity anyway
and it is a way that you can get a no money down deal if there is enough equity and the seller does not want to use it and you then can capitalize on getting a lower LTV loan and thus a lower rate than a 100% loan offers and still get a 100% deal YEAH :o
This is a great way of leveraging your money again using OPM
investors please use grant programs for your down payments if you have a private seller that will do this for you and then you can capitalize on lower LTV’s thus get better rates
Let me give you and example
Seller selling at 75k property appraises at 100k
you get at loan for 80k thus get a 80% LTV loan with great rates
Grant pays for 5000 closing costs plus grant fees and 20k for down payment.
Seller walks with 75k and you get a 100% loan with a 80% LTV BENEFITS ;D
This is a no BRAINER.
NOW you must use a broker that knows this program and what lenders expect this because not all know how to do this so ask questions like if they have every done a grant program on subprime lending side for investment properties NOT JUST FOR FHA LOANS.