What to Do When You Might Need a Little Help

Written by Posted On Thursday, 15 February 2024 00:00

No one’s a Superman, right? No one can do absolutely everything with little effort. No, sometimes we need to reach out when we need a little help to get you where you want to go. That’s true across pretty much all the spectrum. Sometimes people are a bit reluctant to reach out when they need a helping hand. And that’s completely understandable. One might not want to be a burden to someone else or perhaps it’s a bit embarrassing to admit you can’t do it all by yourself and you need a helping hand. This is especially so when getting ready to buy a home and obtain financing from a mortgage company. What can others do that can help get you across the goal line?

The first and perhaps most common is needing some extra cash for a down payment and closing costs. The downpayment is the most common obstacle for first time buyers. Even though there are programs with as little as 3% down, or nothing down in the case of VA and USDA loans, there are still closing costs and cash reserves to consider. 

So, where can you get those extra funds?

Try your family first. Maybe mom and dad can provide a little help or you’ve got a sibling that might have a little ‘non-working’ cash in the bank. So how much should you ask for? The first thing to do is get a Loan Estimate from your lender or broker.

This estimate will lay out the approximate amount of cash needed to close your prospective deal. Let’s say you need $20,000 but you only have $15,000. You’re short 5 grand. Get one of your family members to provide a financial gift. Or, if you can afford the additional payment, maybe you can seek out a second mortgage to get you over the hump. Of course, you can always wait and save up the extra funds needed, but if you need the cash now, this is perhaps the most streamlined option. Make sure you document where the funds are coming from. Your loan officer will help you with this.

You might try local and state agencies that specialize in providing counseling and down payment assistance for first time buyers. These resources are invaluable.

Or maybe some credit issues have popped up. Maybe your credit scores indicate your rate might be a little higher than you can afford. In this case, try getting someone to co-sign for you and use their credit scores in on the equation. Note- some lenders will still consider the lowest middle score of all borrowers on the note.

But your very first step is having a conversation with a loan officer. Tell the loan officer what you’re wanting to do and your loan officer will provide you with a road map to get you where you want to go.

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David Reed

David Reed (Austin, TX) is the author of Mortgages 101, Mortgage Confidential, Your Successful Career as a Mortgage Broker , The Real Estate Investor's Guide to Financing, Your Guide to VA Loans and Decoding the New Mortgage Market. As a Senior Loan Officer and Mortgage Executive he closed more than 2,000 mortgage loans over the course of more than 20 years in commercial and residential mortgage lending. 

He has appeared on CNN, CNBC, Fox Business, Fox and Friends and the Today In New York show. His advice has appeared in the New York Times, Parade Magazine, Washington Post and Kiplinger's as well as in newspapers and magazines throughout the country. 

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