Did You Save the Necessary 20% Down Payment yet?
20% Down Payment
Are you getting ready to buy your first home? You do realize that you’ll need to save a 20% down payment, right? In addition, you’ll need to save the closing costs. In fact, closing costs will run as much as $8,000 – or more.
If you haven’t saved up all that cash yet, I have some good news for you.
You Don’t Need 20% Down
It’s a matter of fact that there are many mortgages written in this country right now that require considerably less than 20% down. Of course, if you put down less than 20%, you’ll probably need to pay some kind of mortgage insurance. But don’t let that stop you from taking advantage of these low interest rates. Get into your own home now! Because this is way to get into your dream home now without waiting to save up all that extra money.
First is the widely known FHA mortgage. The Federal Housing Authority guarantees these mortgages. Mortgage insurance is required, but if this is what it takes to get your own home, it is what it is. You can get an FHA loan with as little as 3.5% down.
Veterans Administration Mortgage
If you are a veteran, my thanks for your service. You deserve any benefits you can get, and this is a good one. With a VA loan, you can purchase with a down payment of ZERO. That’s right, nothing down. There are restrictions however, speak with a loan officer to see if you qualify. Yes, you will pay mortgage insurance, however, this can be paid up front and added into the mortgage.
There are numerous mortgage programs for qualified borrowers. Many of these allow for down payments of less than 20%. Speak with a mortgage lender to learn what you’ll qualify for. And yes, you will need to pay mortgage insurance if you have less than 20% down.
There are some other programs available, the US Department of Agriculture and others, which allow for the low down payment. Again, speak with a loan officer for details.
Now – what can you do about closing costs? They still need to be paid. Hey – here’s an idea. Let’s ask the seller to pay some, or all, closing costs. It can happen. But the details are for another blog post, so stay tuned.
Speak with your mortgage professional to find out exactly how small a down payment you can get by with. And do it soon, because interest rates may rise.
When you’re ready to either buy or sell a home, please contact us.
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