Down Payment Assistance Archives

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Your Loan Officer for Life
July 10, 2025
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What Does “Affordable” Really Mean When Buying a Home?

What Does “Affordable” Really Mean When Buying a Home? https://milend.com/wp-content/uploads/2025/07/TOM528-GRAPHIC-1.jpg 4469 2979 Your Loan Officer for Life Your Loan Officer for Life https://secure.gravatar.com/avatar/18a80453504ae8b038cea2947bb8ae438209cabb7f4915fbf98bc0fc1c58bc66?s=96&d=mm&r=g July 10, 2025 July 10, 2025

Key Takeaways

Affordability is More Than a Monthly Payment
Online estimates often leave out key costs like property taxes, insurance, HOA dues, and PMI. It’s important to look beyond the number on a home listing and calculate your real monthly budget.
Loan Programs Can Help You Buy with Less Out-of-Pocket
You don’t need 20% down to buy a home. With options like FHA, VA, and down payment assistance programs, there are ways to keep upfront costs manageable—especially for first-time buyers.
Know Your Numbers and What You’re Comfortable With
Lenders use guidelines like the 28/36 rule to help define affordability, but the final decision should be based on your personal budget, goals, and lifestyle after you move in. Working with a lender can help you find the right fit.

If you’ve ever been on Zillow and found a house you love, you’ve probably noticed that estimated mortgage payment box under the listing price. But here’s the thing—that number doesn’t tell the whole story.

With home prices and mortgage rates both higher than we’ve seen in years, figuring out how much house you can actually afford takes more than just looking at a monthly payment estimate online. Whether you’re buying your first home or planning a move, here’s how to evaluate affordability the right way—and how a loan expert can help you get the best terms for your situation.

Look Beyond the Monthly Mortgage Payment

When you see a monthly payment listed on a home search site, that number typically includes:

Principal & Interest (based on current average rates)
Maybe property taxes and insurance (though often under-estimated)
Rarely any HOA fees or PMI (Private Mortgage Insurance)

What’s often missing:

Actual local property taxes (which vary county by county)
Current homeowners insurance premiums
PMI, which applies if you’re putting less than 20% down
HOA dues, which can add hundreds a month depending on the neighborhood

💡 Quick tip: Always assume the monthly estimate online is a rough guess. The actual cost may be higher or lower depending on your loan type, credit score, and local taxes.

Understand Your Real Budget

Before falling in love with a home, it helps to understand what price range you can comfortably shop in. A good rule of thumb is to stay within these ranges:

28% of your gross income = your housing budget (mortgage, taxes, insurance, HOA)
36% of your gross income = your total debts (housing + credit cards, car payments, loans)

💬 Example:

If you earn $7,000/month before taxes:

Try to keep total housing costs under $1,960
Keep total debts (including housing) under $2,520

Factor In Your Down Payment & Closing Costs

Most people don’t have 20% down saved, and that’s okay! There are plenty of loan programs designed to help buyers purchase with less money out of pocket:

Conventional loans – often as low as 3–5% down for qualified buyers
FHA loans – 3.5% down with more flexibility on credit
VA loans – 0% down for eligible military service members and veterans
Down payment assistance programs – available in many states for first-time buyers

🏡 The smaller your down payment, the more likely you’ll pay PMI. But with the right loan setup, it’s possible to reduce or remove PMI later.

And don’t forget closing costs, which usually run about 2–5% of the home price. Partnering with a good mortgage lender will help you navigate these options and educate you on the best loan option for you.

Know What Affects Your Interest Rate

Your interest rate isn’t just based on the market—some of the factors that go into getting your best mortgage rate include:

Credit score – higher = better rate
Loan amount and term – 15-year vs 30-year loans have different rates
Points – you may be able to pay a little upfront to “buy down” your rate and save long-term
Loan type – Conventional, FHA, VA, or even jumbo loans all price differently

Working with the right lender can make a big difference at this point because a mortgage expert can work to meet your exact financial goals and put together the best loan options around your down payment, monthly payment, and mortgage rate needs.

Calculate Your Total Monthly Payment

Here’s what your real monthly mortgage payment might include:

Principal
Interest
Property taxes
Homeowners Insurance
PMI (if required)
HOA fees (if applicable)

You can get a quick and easy estimate of how much home you can afford using our online Mortgage Calculator or call one of our licensed mortgage experts to run your numbers based on your actual credit, debts, income, and goals. They’ll show you a detailed breakdown, including what your upfront costs and monthly payment will really look like.

Think About Life After You Move In

Affordability isn’t just about qualifying for a loan. It’s also about feeling comfortable month to month after the move. Ask yourself:

Will you have a cushion for maintenance, repairs, or upgrades?
Are you still able to save for emergencies or retirement?
Would you feel better with a lower monthly payment, even if it means buying a smaller home or in a different area?

The goal isn’t just to get approved—it’s to feel good about your new home and your financial life after the move.

Final Thoughts: What Can You Really Afford?

If you’re trying to figure out what you can afford in this market, don’t rely on home search estimates alone. Additional costs of homeownership like mortgage insurance, taxes, cost-of-living differences in that area, and home maintenance are rarely included in online calculators.

Homeownership is an investment in your future that makes more financial sense than renting—especially since rental prices keep rising. Once you know your real numbers and talk to a lender about loan programs that can help with your down payment, you’ll be able to house-hunt with confidence, and you may be surprised to find that your first home or next home is closer than you think.

While there are credit factors that help affordability, you don’t have to have a perfect credit score, a 20% down payment saved, or wait for lower interest rates to get approved for a home. A great lender can help you look at the full picture and find loan programs that make a home affordable for you right now.

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Your Loan Officer for Life
March 26, 2024
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Creative Financing Options for Home Buyers: A Guide to Making Your Dream Home a Reality

Creative Financing Options for Home Buyers: A Guide to Making Your Dream Home a Reality https://milend.com/wp-content/uploads/2024/03/0424-Week-3-GRAPHIC-1-e1711460232694.jpg 3456 2592 Your Loan Officer for Life Your Loan Officer for Life https://secure.gravatar.com/avatar/18a80453504ae8b038cea2947bb8ae438209cabb7f4915fbf98bc0fc1c58bc66?s=96&d=mm&r=g March 26, 2024 August 13, 2024

Key Takeaways

Explore Beyond Traditional Mortgages: Discover a range of innovative financing options, including Adjustable-Rate Mortgages (ARMs), FHA loans for first-time buyers, VA loans for veterans, and unique strategies like rent-to-own agreements and seller financing. These options offer flexibility and can make homeownership more accessible.
Tailored Solutions for Every Buyer: Whether you’re a first-time homebuyer, a veteran, or someone with a non-traditional income, there’s a financing solution to meet your needs, including easy financing for self-employed individuals, non-warrantable condos, and properties requiring jumbo loans.
Financial Preparedness is Key: The path to homeownership starts with financial readiness. Understanding the importance of saving for a down payment, improving your credit score, and budgeting for the ongoing costs of owning a home (like property taxes and maintenance) is crucial.

Owning a home is one of the biggest financial milestones in our lives, and it’s the first real step toward building real prosperity into your financial picture. It’s a place where memories are made, families grow, and personal space is cherished. When interest rates are high, home prices balloon, and everything from groceries to diapers to cars is more expensive than ever before…getting onto or moving up the property ladder can feel like a pipe dream.

The great news in times like these is that traditional mortgage options are not the only path to owning a home. High cost of homes and cost of living are driving eager home buyers, sellers, and home owners looking to refinance to explore creative financing options in droves. So, I’m here to break down some more off-the-wall options to put your home goals back into reach and then help you weigh the pros and cons.

Understanding Your Needs and Goals

The spring of 2024 is shaping up to be a period of adjustment and opportunity in the real estate market. With the backdrop of the previous year’s trends, we’re looking at a landscape that’s both familiar and full of new potential pathways for buyers and sellers alike.

Traditional Mortgages and Beyond

While traditional 15-year and 30-year mortgages are familiar to most, there are alternatives that offer flexibility and opportunities to save on interest, reduce monthly payments, or both. Let’s explore some creative options:

Adjustable-Rate Mortgages (ARMs): ARMs can be a viable option for those expecting to move or refinance before the interest rate adjusts. Initially, ARMs offer lower interest rates compared to fixed-rate mortgages, potentially saving you money in the short term.
If you’re a blossoming professional looking to buy your first property, need flexibility to travel for work, and expect your income to grow, this can be a good fit and a great entry point into the real estate market.
FHA Loans: Ideal for first-time homebuyers with smaller down payments and less-than-perfect credit scores. FHA helps buyers by insuring the loan so the lenders can offer lower down payments, competitive interest rates, and low closing costs.
These loans are designed to help out first-time homebuyers. The flexibility of having a lower down payment and a shorter or more volatile credit history makes this a great fit for young couples, young families, and single professionals looking to get into their first home.
VA Loans: For veterans, active-duty service members, and some surviving spouses, VA loans provide a path to homeownership with no down payment, no private mortgage insurance (PMI), and competitive rates.
This program is an amazing benefit for veterans and their families, and many veterans that we’ve worked with have completely revolutionized their financial future by getting into a home, or refinancing their existing mortgage into a VA loan.

Creative Financing Techniques

Beyond traditional and government loans, there are several creative strategies to consider:

Rent-to-Own Agreements: This arrangement allows you to rent a home with the option to buy it later. A portion of your rent payments goes toward the purchase price. This can be a great way to build equity and lock in a purchase price while you save for a down payment.
Seller Financing: In some cases, sellers may agree to finance the purchase themselves. This can eliminate traditional lender fees and offer more flexible terms. It’s particularly useful in markets where buyers and sellers are looking for innovative ways to close deals.

Generally, this option has more risk and less reward that many more stable financing options, but if you want to learn more about seller financed properties, check out my in-depth article:

Guide to Owner Financing for Home Buyers

Lease with Option to Purchase: Similar to rent-to-own, this option involves leasing a property with the right to purchase it at a predetermined price before the lease expires. This can be an excellent way to “try before you buy.”
Assumable Mortgages: Assuming the seller’s mortgage can be an option if the current interest rates are higher than the rate of the existing mortgage. This involves taking over the seller’s remaining mortgage balance and terms, potentially saving on closing costs and interest.

Specialized Lending Programs: A Closer Look

Milend offers specialized lending that we find makes home financing more accessible than most other lenders for self-employed borrowers, non-warrantable condos, and jumbo loans for higher-value properties.

If you have struggled to get financed on an unconventional property type, or with documenting your income, we have some of the most flexible financing options for your needs.

The Importance of Financial Preparedness

Regardless of the financing option you choose, financial preparedness is key. This includes saving for a down payment, improving your credit score, and understanding the full scope of homeownership costs, including property taxes, insurance, maintenance, and utilities.

Personal Success Stories: How Creative Financing Made Dreams Come True

We’ve had the privilege of helping many families navigate the path to homeownership through creative financing. One memorable story is that of a young couple eager to buy their first home but struggling with a limited budget and less-than-stellar credit. Through a combination of an FHA loan, help paying down credit card debt, and in-depth guidance from their Milend loan consultant, they were able to improve their financial standing and purchase a home that fit their needs and budget. Their journey from renters to proud homeowners is a testament to the power of perseverance and the right financing strategy.

Your Next Home is Within Reach

Homeownership is within reach, even if traditional financing options don’t seem like a perfect fit. By exploring creative financing options and preparing financially, you can find a path that aligns with your needs, goals, and financial situation. At Milend, we’re committed to helping you explore all your options and guide you through the process, ensuring you make informed decisions every step of the way.

If you’re ready to take the next step toward homeownership, we’re here to help. Post in the comments or reach out through our Contact page!

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Let’s Grow Together

As we navigate the spring market and beyond, let’s remember the values that bind us: trust, commitment, personal growth, and the importance of home. If you’re pondering your next move or seeking guidance in the ever-changing real estate landscape, reach out. Together, we can explore your options, prepare for the future, and turn the dream of homeownership into reality.

Stay tuned for more insights, and don’t hesitate to join our community for updates, tips, and stories that celebrate our journeys home, one step at a time.