If the idea of a 20% down payment seems difficult, there are other loan options out there.
A recent survey has shown that coming up with the money for a down payment is what most people consider to be the most difficult part of buying a home.
A common misconception is that you always need 20% for a down payment. This simply isn’t the case. Various loans exist for different circumstances, including being a first-time buyer.
In fact, the FHA loan is one the most common loan options for help with down payments. The FHA is a 3.5% down payment loan. In a market like ours where the average price of a property is $550,000, the conventional 20% down payment would total $110,000. That’s not exactly affordable for most people.
The FHA allowing you to come to the table with significantly less is a great help to many buyers out there, but keep in mind that you will need to pay for private mortgage insurance. This is just a few hundred dollars more, though.
"Coming up with the money for a down payment is what most people consider to be the most difficult part of buying a home."
Also, there are different options out there which don’t require this type of insurance.
For veterans, there’s an option called the VA loan. VA loans require 0% down. This is my personal favorite when it comes to loan options. If you’re a veteran, you’d be missing out to not take advantage of this loan type.
You can even use it to buy multiple-unit properties like duplexes. Overall, this is a fantastic loan that I highly recommend.
Another 0% down loan option is the USDA loan. While you don’t need to be a veteran for this option, you do need to purchase a rural area property.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.