How Much of a Down Payment Do You Need?
Buying a home, especially for the first time, can make you worry about saving enough for a down payment. But here's the good news: You might not need as much as you think. Traditionally, buyers put down 20% of a home's price to avoid private mortgage insurance (PMI), which protects lenders if you stop making payments. For a $200,000 home, that means a $40,000 down payment. Without 20% down, you'll pay PMI, possibly around $150 a month. However, you can qualify for conventional loans with as little as 3% down, or $6,000 for a $200,000 home. FHA loans require just 3.5% down if your FICO score is 580 or higher. So, don't let down payment worries stop you from buying your first home. You can also look at our downpayment assistance options here.
How Down Payment Assistance Made One Woman's Dream of Homeownership A Reality
Jackie's journey toward homeownership started back in December 2019, when she had to make the agonizing choice to move her elderly mother, for whose care she had moved into a larger, more accessible home, into an assisted living facility. She was homeless since she couldn't pay the rent on her own until being asked to move in with a friend. When Jackie started looking for a new place to live, she soon realized that rent in her neighborhood had been rising at a rate that was even faster than the cost of homes, making homeownership a more appealing option since it would give her the security of long-term housing costs and the benefit of built-up equity. Jackie decided right there and then to buy her own house. Jackie overcome various financial challenges to become a homeowner via perseverance and hard work. She had no credit after a divorce because everything had been in her ex-husband's name, but she worked hard to establish credit by getting a starter card and dutifully paying off the balance each month. During the early stages of COVID, she was able to enhance her income by finding a work-from-home position. Jackie then met Pam Marron, a mortgage broker with Innovative Mortgage Services, Inc. who is enthusiastic about introducing homebuyers to financing options that are accessible. Pam was determined to provide Jackie with the cheap financing she needed to fulfill her dream of becoming a homeowner, so she combined the DPA offered from Pasco County Community Development with Freddie Mac's BorrowSmartSM program through United Wholesale Mortgage. In the end, Jackie was successful in obtaining $15,000 in DPA from Pasco County in the form of a "silent second" loan with 0% interest that she will repay over time. Jackie also received a donation from Freddie Mac for $2,500, which is fully forgiven. Together, these efforts enabled Jackie to become a homeowner, giving her a sense of freedom, independence, and assurance that each mortgage payment helps her accumulate equity. Looking to purchase a home? Find down payment programs in your area today and see if you’re eligible!
Go from renting to owning a home
Are you tired of shelling out money every month for rent, without anything to show for it? Have you been dreaming of owning your own home but feel like the upfront cost is too high? Well, you're not alone. According to a recent survey, 60% of renters say that down payments are a barrier to buying a home. But don't let that discourage you from pursuing your dream of homeownership. There are down payment assistance programs available to help make your dream a reality. Buyers often assume that they need to save up 20% for a down payment, but that's not necessarily the case. There are programs available that require as little as 3% down. Some programs even offer grants that don't need to be paid back. It's worth looking into these programs to see if you qualify, as they can provide a significant boost to your ability to purchase a home. Owning a home can also bring about a new lifestyle. You'll have more control over your living environment and can make changes that suit your tastes and needs. You can also enjoy the stability of having a fixed mortgage payment, knowing that your monthly housing expenses won't fluctuate as much as they would with renting. In the real estate world, there's always news to keep up with. Staying informed about market trends and changes to laws and regulations can be helpful when making decisions about purchasing a home. For example, the introduction of new tax laws in 2018 changed the way homeowners can deduct mortgage interest and property taxes on their tax returns. Staying up-to-date on these changes can help you make better-informed decisions about when and how to buy a home. In conclusion, don't let the perceived cost of a down payment discourage you from pursuing your dream of homeownership. There are down payment assistance programs available that can make it easier to make that initial investment. Owning a home can bring about lifestyle changes and provide more stability in your living situation. And staying informed about real estate news and trends can help you make better decisions when it comes to buying a home. So, go ahead and take that first step towards owning your own home!
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