Buy a home without cash from parents

First-time homebuyer down payment programs, offered by local and state housing agencies, extend grants and loans to first-time homebuyers who meet the guidelines. Greg Cook, a loan consultant at Guild Mortgage Co. in Temecula, Calif., is a fan of the programs in his area. Dacey is less enthusiastic, pointing out these programs tend to have strings attached, such as income restrictions and payback requirements.

Buyers and sellers traditionally share the closing costs of a home sale. But sometimes a seller will pick up most or all of the buyer's costs as part of the deal. For example, a bank that owns a property outright due to a foreclosure or agrees to take a loss on the seller's mortgage in a short sales oftentimes will pay the buyer's closing costs, Cook says.

Still, buyers typically need some money of their own.

"If nothing else," Cook says, "they have to have enough to write the earnest money check."

That initial deposit can amount to several thousand dollars depending on the home's purchase price.

First-time buyer tips

Regardless of whether Mom and Dad make a contribution, prospective buyers should meet with a lender upfront to find out how much they can borrow. Buyers also should clean up any errors on their credit report and try to build up their emergency savings in addition to their down payment and closing cost funds, loan officers say.

"It's not a bad thing to have too much money at closing," Cook says.

Nainan says buyers should educate themselves about credit scores, pay off their credit card bill every month, and use online budgeting services to track their expenses and increase their savings.

"I can't think of anything," he says, "that's more worth saving for than buying a home."

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