Going by the tradition, if you want to buy a house, you’ll need to pay 20 percent of the original fee as down payment, but the fact remains that you can buy your very first home with a lesser down payment. 

Sometimes, the idea of saving up to 20 percent for the initial down payment could prove to be a very difficult task. The good news, however, is that you can purchase a  home with as little as 3 percent down and in some cases no down payment at all.  

“The notion that a buyer needs 20 percent every time as a down payment to purchase a house is very untrue”, says Alexander Romanov, an expert investor who offers tips on selling your house in Seattle. “The flexibility in the real estate world today offers a wide range of products that allow lower payment options” 

In the instance that a buyer qualifies for a home, chances are that they qualify for that with a lesser down payment. However, the buyer has to keep in mind that some options are only available to those with good credit scores. The downside of paying a lesser down payment is that the mortgage balance becomes higher than when you have a higher down payment and vice versa. 

Should you be looking to buy a home soon, it’ll be wise to save right above your down payment even when you are opting for a loan with zero down payment. The extra cash you’ve put aside is needed to cover expenses such as closing costs, taxes, and insurance. Another smart move is consulting with local authorities for products and programs that can help ease the issue of down payment. As a first time home buyer, the services of an expert broker or mortgage officer can never be overestimated. An expert will have all the expenses broken down in very simple terms for you to understand. There are four mortgage loans you can easily apply for and these come with a low down payment. They include: 

•    Federal Housing Administration Loan 

•    U.S. Department of Agriculture 

•    Conventional Mortgage 

•    U.S Department of Veterans Affairs 

If you are working with a broker or mortgage officer, they should be able to present all these options to you and help analyze the best fit for you. The task ahead of you is to find a suitable lender who can offer one of these loans. Outlets such as Freddie Mark and Fannie Mae are always willing to back up loans with as low as 3 percent, but you’ll need a good credit score to get qualified.  

In the case of FHA loans, you are likely to get a loan with a down payment of 3.5 percent. The FHA also qualify borrowers with thin credit card records and lower credit scores. However, you’ll have to pay a mortgage insurance premium of 1.7 percent of the loan you requested. Also for $100,000 borrowed, the FHA demands a monthly mortgage insurance premium of $70 so long you have the loan. 

The U.S. Department of Agriculture USDA offers mortgage loans for zero down payment provided as a buyer, you meet certain income rates and some other qualifications. The USDA demands an upfront mortgage insurance premium of 2 percent of the original amount. The USDA loan monthly charge for every $100,000 borrowed is $33. 

For those serving in the military, a VA loan can be granted without a down payment. However, a funding fee of 2.15 percent of the loan will be required instead of private mortgage insurance. The VA loan stands out among FHA and conventional loans as it has the lowest rates. 

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