Understanding Down Payments

Buying a home is a major financial decision — one of the largest you’ll likely make in your lifetime. A significant part of this process is saving up for a down payment. Many homebuyers will work hard and save for many years to build up their savings for this important purchase. But what amount is right for you? That all depends on the cost of the home you’re looking to buy and what your personal financial situation and goals are.

Going Conventional

The traditional down payment amount is 20%. For example, if the home you’re looking to purchase is $200,000, the down payment will be $40,000. Having this amount will save you from paying mortgage insurance, which is a fee that’s added to your monthly payments that protects lenders in case you’re unable to pay the mortgage. But what if you want to buy a home and don’t have the full 20% saved?

Options are available:

Going Government

The U.S. Government offers a variety of home purchase programs that help make homeownership possible for more people. These programs are offered through agencies such as the Federal Housing Administration (FHA), the U.S. Department of Agriculture (USDA), and the U.S. Department of Veterans Affairs (VA). Each of these agencies offers specific loan programs with different down payment requirements.

Learn More About Your Options

If you have any questions or are ready to move forward with a home purchase, contact us to speak with a licensed loan officer. We’ll explain the options available to you, help you understand your obligations, and walk you through the home financing process from start to finish. We’ll also get you pre-qualified so you have an understanding of what you could qualify for. It only takes a few minutes and won’t take any files or documents to get started.


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