How to Buy a House With $2,000 Down

The Basics: 

black man selling homeI think by now everybody knows that the US economy is in really bad shape.  Unemployment is high, millions of people are out of work or underemployed, and the real estate market is in turmoil.  These conditions certainly have spelled financial disaster for many Americans, but for those that are fortunate to have maintained their employment and avoided financial difficulty these are the best of times.  Investment and buying opportunities abound as there are many discounts to be had on small items and large items alike.  In fact, for those that are financially able this may be the best time to buy some of the large ticket items that you have been wanting.  The combination of a down economy, buying incentives and the right personal circumstance could make this the perfect time to buy a home.

According to an October article in Forbes magazine, 1 in 21 mortgages is in foreclosure, which is a four-year high.  As of September, housing inventories have risen for the ninth straight month, which means that the overall housing supply is still far outpacing demand.  Prices continue to fall and interest rates continue to drop.  These factors in combination, while all bad for those in financial difficulty, create the perfect buying opportunity for those in position to take advantage.

"Interest rates are as low as they have been in years and in some cases home prices have dropped up to 50%" says Larry Bishop of BFS Realty.  "Now is a great time to buy".  To that end, BFS Realty has implemented a homebuyers incentive program that allows prospective buyers to purchase a home with as little as 1/2% down, which equates to $2,000 on a $400,000 home.  This program, which contains a corresponding $12,000 grant from participating banks, allows for a buyer to get into a home that in years past may not have been possible. If a buyer is looking for a home to live in (the property must be owner-occupied), has a decent credit score (above 620), and has verifiable income (below $108,000) this California-based program may be a perfect fit.  "For a young person with a good job and good credit this could be the opportunity to purchase a nice home and provide themselves with some security and stability for themselves and their family" says Mr. Bishop.

What you need to know: 

Before buying a home you must get pre-approved for a loan.  Most reputable real estate brokers and agents will not spend time researching homes with you unless they know that you are actually in a position to buy the home that you select.  Pre-approval is also the best way for you to know exactly how much home you can afford and keeps you from overspending.

Whenever purchasing a previously owned home you should always purchase a Home Warranty Plan to cover things that may be wrong with the property that were not discovered during the purchase process.

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Larry Bishop, Owner of BFS Realty, was a contributor to this article.  Mr. Bishop has over 30 years of experience in the real estate industry as an investor, broker and agent.  To find out more about the homebuyer program mentioned in this article visit the BFS Realty website or check out the BFS Resource Listing on this site.

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