We often run into people who tell us they would like to buy a home soon, but have to wait because they need to save up for a down payment.
For some people, that might be the right way to go, especially if you have an accommodating landlord named Mom or Dad.
But for the majority, you are not really saving if you are renting a home while trying to save to buy a home. And that is especially true these days, as rental rates relative to income are skyrocketing.
So, how does a 5%, 3.5% or even 0% down payment sound? While the 20% down payment is still the gold standard – and allows you to skip paying expensive mortgage insurance – there are conventional, FHA and VA loan programs that allow these much smaller down payments.
The 0% down payment is one of the ways Uncle Sam says thanks to our veterans from the armed forces. If you’re a vet and haven’t taken advantage of this VA benefit, please look into it right away. You’ve earned it!
The 3.5% down payment is the minimum for an FHA loan, which has others advantages as well, chief among them being more lenient credit requirements.
The conventional mortgage has allowed a 5% down payment for a few years. Of course there is mortgage insurance until you have at least 20% equity in the property.
While credit is still tighter than before the housing bust, we have seen a big increase in loans being approved over the last 2-3 years. And rates are still historically low, and will be for some time.
If you’re ready to buy and need some help to get pre-approved for a home loan, contact us right away. We will introduce you to our lending partner and get you started on the road to home ownership!
And if you just need help with either buying or selling a home, we’re here to assist, any time. Contact us at 727-286-1249.Google+