Now that we have explained how Down Payment Assistance works, let's see the numbers in action.
Meet the Jensens, they have saved a down payment for their first home, however rising prices mean they no longer have 20% down to purchase a home in their target neighborhood, get the best rates and avoid PMI. They could use some assistance.
Target Purchase Price
$1,000,000
Down Payment Saved
$100,000
Desired Down Payment Assistance from Noah
$100,000
In 10 Years, the Jensen's buy out Noah's investment. Here are sample payoff scenarios, based on the future home values.
Home Values Fall
Home Values Rise
Future Home Value
$800,000
$1,200,000
Purchase Price
$1,000,000
$1,000,000
Noah’s Down Payment Assistance
$100,000
$100,000
Mortgage Balance 1
$600,000
$600,000
Jensen’s Equity
$156,250
$406,250
Noah Buyout
$43,750
$193,750
Disclosures:
The pricing estimate and associated terms presented above are for illustrative purposes only. Actual investment terms will be based on a full application and underwriting process that may include a credit check, home appraisal, income verification and other documents collected pertaining to the user and their underlying property.
1 The mortgage balance at the end of 10 years assumes a 30-year fixed mortgage with standard amortization. The actual mortgage balance for the homeowner at the time of payoff / end of the term may be different based on the terms and conditions of the mortgage.