Now you can buy a home with just 2% down
Saving for a down payment on a home can be the biggest hurdle for prospective homeowners.
It could take years to save the 20% to secure a mortgage or require a significant financial gift from family members. At Ownify, we ask for just a 2% down payment. Here’s why:
2% down is a lot less than needed to buy with a mortgage
The average home in North Carolina is just over $336,000 which would equate to a significant sum if a lender required the typical 10-20% down payment- between $33,600 to over $67,000. If you can secure a mortgage with a smaller deposit, then you are likely to need to also pay Private Mortgage Insurance, or PMI, until you reach 20% equity, which is yet another cost first time homebuyers need to consider.
Then there are the additional costs, such as closing costs and due diligence costs, that fall to the buyer that must also be factored in- potentially around an additional 5% required on top of the down payment. At Ownify, we cover due diligence for you, and include closing costs in the overall entry price. You only pay 2% of that overall entry price, meaning the upfront cost burden is significantly lower. For that average home in North Carolina, we would need less than $8,000 down.
Family gifting without the restrictions
Family help when buying homes is a big deal. Around a quarter of all first time homebuyers used a gift from family to finance their deposit which is great if the support is available, however often comes with strict rules attached. It must be a gift, not a loan, usually requiring a signed letter of evidence that this is the case. We welcome family help towards the down payment at Ownify, but we are more than happy that this can take the form of a loan if desired. This can be repaid whenever you wish, for example you could have $3,000 due back to you in your current rental security deposit, so you could get a short term loan from your family member for this amount to put towards the 2% down, and then pay it back once you receive this rental deposit in your bank account.
What about other down payment assistance options?
There are some down payment assistance programs, but they are often difficult to qualify for as often specific to a state and/or set of particular circumstances and usually have certain rules attached to them. Therefore, these are not necessarily a suitable or simple solution for all. If you are considering such options, you should check out the eligibility criteria, the rules that are associated with accessing the assistance, and what the application and house purchase process looks like as it could be quite onerous. At Ownify, we do have qualification criteria, but these are focused solely on whether you can comfortably afford the fixed monthly payment and not what job you have or any other such restrictions.
In summary, buying a home through Ownify’s fractional ownership program could save you a significant sum and many years of saving, as we require you to only put down 2% of the entry price of the home. And the moment you walk through your front door, that equates to 2% of the property that you own. You can find out more about the other benefits of becoming a first time homebuyer with Ownify by watching this video.
If you're ready to get pre-qualified then apply now here.
If you would like a quick check on your eligibility for Ownify, use our tool here.
