Down payment options for buying a home
If you’re saving to buy your first home, one of the biggest questions you may have is “how much will I need for a down payment?”
For those who have never gone through the home buying process, the idea of needing a 20% down payment may be overwhelming. This could end up taking years to accumulate as you spend your money renting rather than building equity in a home of your own.
You may be relieved to know that for most buyers, low down payment options are still available. Depending on where you’re buying and your financial situation, there are plenty of options for you to take advantage of without breaking the bank.
0% Down– The Veterans Administration and US Department of Agriculture (USDA) both offer a 0% down loan program for individuals and/or properties that meet their criteria. With only a little cash out of pocket to close, these options open the door to more buyers in the market.
3.5% Down -The Federal Housing Administration or FHA loan program can agree to as little as 3.5% down. This program tends to be more lenient towards minimum FICO scores and other factors that could affect your home loan approval as well.
5% Down – Another low down payment option could include Fannie Mae and Freddie Mac for a conventional loan, offering down payment options as low as 5%. This can be dependent on influences such as property type, credit score, and occupancy.
Are you shocked at how low you may be able to go? Working with a lender that can provide a large selection of loan programs can make a huge impact on what you can and can’t afford.
Don’t let your previous assumptions keep you from pursuing your dream of purchasing your first home! Whether you have set aside a little or a lot, reach out to me today, and I will work on finding the perfect formula that is right for you and your family.