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Down Payment Options for Home Buyers

Down Payment Options

Down payment information and resources for home buyers.

The purpose of this section of our website is to educate you on all things related to down payments. Our goal is to provide you with the absolute best resource of information on different loan programs, qualification guidelines, and other pertinent information related to down payments.

We hope to provide thorough, adequate information and answers to all of your questions. For some questions, instead of writing a brief answer, we have written out detailed information so that you can make an informed decision for what loan option to pursue . For such questions, follow the link to a page dedicated to the question at hand. Some of the most frequently asked questions about down payments are:

Are there any home buying loans that do not require any down payment?

The only current home buying loan program which do not require any down payment are Veterans Administration and USDA loans, or through the HUD good neighbor next door program.  The Veterans Administration insures loans through the Department of Veterans Affairs.  We are a VA lender and provide 100% financing to qualifying applicants.  Another option for an extremely low down payment is through a program by HUD called good neighbor next door.  This home buying program is limited to teachers, firefighters, police officers, and emergency medical technicians. Eligible participants may qualify to purchase select HUD homes in revitalization areas at a 50% discount, and if they qualm for a FHA loan they can buy the home with only a $100 down payment.

Can I buy a house with only 5% down?

Yes, we provide options for a home loan with 5 percent down payment, including for first time home buyers.  This includes mortgage programs through the FHA, VA, USDA, and conventional home loans.

Can I buy a house with 10% down? What are my options?

With a 10% down payment your options start to increase for what loan programs you may qualify for. Assuming of have sufficient credit history as well as meet other underwriting guidelines you likely will not encounter any problem qualifying for a conventional or FHA home loan.

10% down payment – conventional or FHA loan?

FHA loans are easier to qualify for than conventional loans. Additionally, an FHA insured mortgage only requires a minimum down payment of 3.5%. If you would prefer to put 10% down either way you may still want to pursue an FHA loan, especially if you have less than perfect credit. We are more likely to approve an applicant for an FHA loan that has minor credit issues. An FHA insured loan is backed by the FHA in the event of a default, which allows lenders to fund more risky loans.  If you have better credit, such as that which may be deemed “good” or “excellent” than a conventional loan may provide better terms.  The best thing to do is to prequalify or provide a full application and compare approvals for different loan programs to see what provides the most favorable terms.

Can I borrow the money used for a down payment?

You may borrow money for a down payment on a FHA loan. The money used for your down payment can be gifted from a friend relative, a government agency or any nonprofit down payment assistance fund.  Conventional loans require that the money used for your down payment be from your own savings or retirement fund.

What is the best home loan for a large down payment?

If you plan to put 20% or more as a down payment, and if you have good credit, job history, and DTI ratios than a conventional loan is most likely going to provide the best rate and terms. You will also not be required to pay mortgage insurance if your loan-to-value ratio is less than 80%.

Best mortgage for half down?

A conventional loan is almost always the best option for a home buyer who will be placing a substantial down payment on their home purchase. At 50% LTV you will not have to pay any mortgage insurance which makes a conventional loan better than an FHA insured loan.  You also should be entitled to an especially low interest rate as a benefit of having such a low LTV.

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