Understanding Down Payments
September 25, 2018
So how much money do you really need for a down payment?
Before you sign the lease on another apartment or rental, stop and consider if purchasing a home may be a better option for you. Many people falsely assume that just because they don’t have a big down payment in the bank, they cannot afford a home. However, there are numerous options that are available so you can invest in your future.
In the past, a down payment of at least 20% was required to secure a home loan but now there is a wide selection of financing options that may be available to you. For example, FHA, USDA or VA loans could be an option and require as little as 0-3.5% of the total purchase price down. An Insured Conventional loan also typically requires less of a down payment than a standard Conventional loan, just be prepared to pay extra for Private Mortgage Insurance (PMI).
While these are some of the most commonly used loans, there may be other options available depending on your individual situation. There are also programs for down payment assistance, just be prepared that qualifying may take a little extra time and work on your end. We are here to educate and assist you in finding a place you are happy and proud to call home. If you have questions or would like the names of a few lenders that we enjoy working with, please contact us and we would love to help!