Dear Claire: What are Some Creative Financing Options?

Creative Home Buying Strategies

How do we get creative with getting you a house? So there’s a few things that we can do. First, let’s talk about first-time home buyers. You’re scraping together everything you can to be able to put a down payment on the house. And you’re thinking, “How do I save enough and how can I come up with some ways of making my money go further?” There are several programs specific to the Portland Metro area, Oregon, the Feds, and the county.

There’s a down payment and assistance loan. Pretty much what you have to do is go through these classes through the Portland Housing Center, and then find a bank where you will deposit your money every month and then they match it. So, if you agree to put in $100 a month, they’ll match it with $100 a month so that you can double your money for your down payment. So that’s super sweet.

There’s also the Oregon Bond that matches your down payment in a different way. It depends on your income, and you have to be under a certain threshold of income. I think Oregon Bond changes sometimes and you also have to be in certain areas of the state. In both of these instances, they’ll give you more money to be able to buy a house. Then there’s the FHA, which is the Federal Housing Authority, which has loan programs that don’t necessarily give you more down payment but they’ll let you qualify at a higher debt to income ratio and they have mortgage insurance. So there’s ways that you can finagle it so that you can qualify for more than you normally would with just a straight conventional loan.

For those of you that own property, which has a different set of problems, you might not want to buy a place until you’ve sold your place. Or, if you want to sell your place, you may be worried about finding a new place. In both situations, there are programs that can bridge the gap. You could get a home equity line of credit on your existing home to enable you to buy your new home. Then once you sell your old home, you can put that additional money down on your new home. It depends on the lender. Some will not allow you to do that, but a lot of them will.

There’s also a program called a Bridge Loan. This is more of a specialty product, and you must qualify for both mortgages. A lot of people can’t do that, but if you can, it enables you to borrow against the equity you have in your existing home to purchase a new home. Then, when the home is sold, that goes to pay off the balance on the existing home.

And, last but not least, if you have a 401k, you may be able to borrow against it. There are situations where this may work, especially for people that are first-time homebuyers. However, it depends on your 401k and you’ll need to check with your administrator. Sometimes they’ll allow you to borrow against your 401k to put a down payment on your home.

These are a few ideas for you. If you have any questions, and if your 2021 goal is to buy a home, reach out to me at [email protected]. I can walk you through these options to figure out which one would be ideal for you, and then send it to the right person to help you figure it all out. I hope you have a wonderful day today and I will talk to you soon.

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