Choose Down Payment Assistance, Not Secret Second Mortgages
Your frenemies love to humblebrag about how they pay so much less per month for their mortgage than you do for your rent. They tell you that, if you have any common sense, you will buy instead of renting, as if the thought had never occurred to you. You would jump at the opportunity to pay as little for housing per month as your frenemies do, and build home equity while doing it. The problem is that no opportunity emerges for you to pounce on. A huge amount of your paycheck goes to housing, probably more than a third, if you live anywhere in South Florida other than a shack that overlooks the Everglades, where gators and anhingas are your next-door neighbors. Under such circumstances, what hope do you have of saving for a down payment? If you are a nepo baby, your parents can give you money for a down payment. If not, your options are more limited. Some people turn to shady sources of funds, but this almost always backfires, leaving them in worse financial shape than they were in when they started. If you are still reeling from the time that, in your desperation, you listened to the advice of a dishonest influencer or poorly informed friend and borrowed a secret second mortgage, contact a Boca Raton debt lawyer.
Beware of Shady Sources of Funding for Your Down Payment
If you have never heard of secret second mortgages, this is for a good reason. Lenders that issue them do so quietly, because they are illegal. A secret second mortgage is a loan to cover the portion of the down payment that the borrower cannot cover, but it takes deception to get one. For example, assume that the seller is requesting a $50,000 down payment, but the borrower only has $20,000. The borrower tells the original mortgage lender that the down payment is $20,000, then borrows $30,000 from the secret second mortgage lender and pays the whole $50,000 to the seller. It is hard to get away with so much secrecy, when there is so much scrutiny involved in the mortgage loan approval process. Even if you don’t get criminal charges for mortgage fraud, the seller will back out of the deal when they find out about your deception. Meanwhile, since you already borrowed the secret second mortgage loan, you will still be responsible for repaying it. In other words, secret second mortgages are risky.
Above Board Sources of Down Payment Funds
Grant funding is available to help borrowers pay down payments for home purchases, especially if they are first-time homebuyers or if their income is below a certain level. Government entities are usually the ones that issue these grants, and addressing your other debts can help you qualify for down payment assistance.
Work With a Debt Lawyer About Getting a Mortgage the Right Way
A South Florida debt lawyer can help you get a home mortgage loan without resorting to desperate and risky measures. Contact Nowack & Olson, PLLC in Boca Raton, Florida to discuss your case.
Source:
investopedia.com/terms/i/interestonlymortgage.asp
