Whether you’re a first-time homebuyer or a seasoned buyer, buying a new home can be a source of stress. Uncertain financing is probably one of the biggest sources of this type of stress. However, being prepared and educating yourself can greatly reduce the angst you might feel about the home buying process. Here is a look at five lesser-known details about home financing.

1. You May Qualify for Down Payment Assistance

Saving for a down payment isn’t easy. Down payment assistance may come in the form of an interest-free loan, or it may be a grant, meaning it doesn’t need to be repaid. For some programs, you don’t even have to be a first-time homebuyer or have a low income. There are government-sponsored programs, private sector opportunities, and down payment assistance programs for veterans. Consult your lender or trusted for more information on programs that may be available to you.

2. Mortgage Credit Certificates Are Available in Some Instances

A mortgage credit certificate can be a great benefit to the first-time homebuyer. In this program, some local or state governments provide a home buying incentive in the form of a tax credit, which is derived from a set portion of the interest you pay each year on your home loan. It’s a credit, not a tax deduction, which means a mortgage lender can estimate the amount of credit you would receive and count it as income, thus enabling you to potentially afford a more expensive home. However, the Internal Revenue Service has an annual $2000 cap. This credit lasts for the life of the mortgage loan provided the buyer continues to live in the home.

3. You Can Shop Lenders

Many people are under the mistaken impression they cannot compare lenders. They may feel they have to work with only their personal bank, or they may believe it would be too costly or time-consuming to shop around. Sometimes, people with credit issues think they only have one option. To ensure you get the best deal, consult several lending institutions. You can also work with a mortgage broker. A broker doesn’t lend the money, but instead arranges the transaction and helps you find the best lender for your specific situation.

4. Closing Costs Are Negotiable

All the fees and costs associated with buying a home can add up quickly, which can be especially daunting for low-income buyers. Depending on the housing market in your area, you may be able to negotiate with the seller to pay some or all the closing costs for you.

5. Location-Based Loans May Be Available

If you are interested in purchasing a home or condo in a certain area, such as an urban renewal neighborhood or an area that has been destroyed by a natural disaster, there may be additional financing opportunities.

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