Homeowners who have paid off some loan principal while their home values have increased have built up equity. That is, they can sell their home for a tidy profit, which they can rely on for the down payment on their next property.
But what do you do if you’re a first-time homebuyer?
Coming up with the standard 20 percent down — or $40,000 for a $200,000 property — may seem like an insurmountable obstacle.
The good news is there are options. Keep in mind that lenders are well aware that many first-time buyers lack the starter funds to jump into the market without some help.
In fact, many banks are obligated under the federal Community Reinvestment Act of 1977 to assist low- to moderate-income buyers, even if they’re not obligated to market that fact.