Make a Smaller Down Payment on Your Mortgage
You may have heard it’s a great time to buy a house with interest rates remaining historically low. And you may know the average down payment for a home purchase is around 15%. But did you know there are some mortgage programs that call for less money up front – in some cases as low as a 3% or no down payment at all. Whether you are a first-time homebuyer, veteran of military service or looking to borrow a large amount for your home, you have options. PrimeLending can help make understanding them simple.
If you’re buying your first home or are a buyer with limited credit or income, an FHA may be the perfect choice. FHA loans are insured by the Federal Housing Administration and allow PrimeLending to offer customers an affordable interest rate, a low minimum credit score and a low down payment. In fact, your down payment could be as low as 3.5 percent of the home’s purchase price.
Granted, you’ll have to pay for mortgage insurance on top of the principal amount. So it may be a more expensive in the long run, when compared to a conventional loan with 20% down (and no insurance required). But for many people, it’s a trade-off they are willing to make to buy a home now. Your PrimeLending loan officer can help you weigh the pros and cons of a 3.5% down payment and make the best decision for your situation and goals.
For American veterans and active duty military, VA loans as guaranteed by the U.S. Department of Veterans Affairs are a great way to buy a home. With a VA loan, you don’t have to make a down payment or pay mortgage insurance premiums. For our veterans and military members, this means they can save even more money. PrimeLending’s loan officers know how to help you through the VA loan process and into your dream home. It’s really that simple.
If you are looking to borrow more than $417,000, you will need a Jumbo Loan. That just means the loan amount is above the conventional conforming limit for loans that can be insured by Fannie Mae and Freddie Mac and therefore generally considered higher risk.
However, some lenders such as PrimeLending, offer a 5% down payment option – also known as a 95% LTV (loan-to-value) loan – for qualified buyers. This option not only lets you avoid making an enormous down payment, but doesn’t require private mortgage insurance (PMI). If you are in the market to borrow a large amount, Primelending can help you evaluate all your Jumbo Loan options.
Don’t Let a Down Payment Stand in Your Way
If you are interested in purchasing a home, but are concerned about having the down payment you’ll need, contact us today. You probably have more options than you think.
*Please see Rebecca for specific costs.