Alexandria, VA – Let’s debunk a myth! You CAN buy a home with less than a 20% down payment. Many potential home buyers give up before they’ve even started because they think they don’t have enough for a down payment. While 20% down is needed to avoid paying private mortgage insurance (PMI) on a conventional loan, it is not required. There are many loan options available with down payments that are considerably less. These options can help people enter the real estate market sooner than they expected.
In fact, first-time buyers are putting down a median of just 9%, and 59% of homeowners put down less than 20%.
We asked one of our local, preferred lenders, Jordan Jackson, VP of Mortgage Lending at Rate, to share some of these options:
- FHA Loans: Minimum of 3.5% up to $806,500. Minimum 5% down over that. The borrower does not need to be a first-time home buyer. The borrower will pay permanent mortgage insurance.
- Jumbo Loans: Loans over $1,209,750, borrowers can put a minimum of 10% down with no mortgage insurance, but the rate will be a bit higher.
- VA Loans: Borrowers have a zero-down option with no mortgage insurance.
- Conventional Loans: Minimum down payment is 3% of the purchase price. The borrower will pay mortgage insurance until they reach 20% equity in the home.
- Special Programs: There are also special programs that allow for the down payment as low as 1% if the borrower’s income is less than 80% of the area median income for a purchase price up to $806,500. At least one borrower must be a first-time home buyer to be able to put 1% down. The borrower will pay mortgage insurance until they reach 20% equity in the home.
Many potential buyers are holding off their dream of homeownership because they believe they need to save up 20% for a down payment. But the reality is very different. Contact us and we would be happy to have one of our preferred lenders discuss with you how homeownership may already be within your reach.
Listing of the Month
637 21st Street S, Arlington, VA 22202
5 Beds, 5 Baths 4,554 Square Feet
Contact Melody for more information at [email protected].
(703) 298-0562
That myth stops so many people from even starting the process. If you’re exploring these loans and need help managing your mortgage payments down the line, it’s a good idea to have the HomeLoanServ customer service number saved. It’s always smart to have that contact info ready in case you run into questions after closing. Taking that first step to learn about your options can open doors you didn’t think were possible.
The fact that so many first-time buyers are putting down way less than that really opens the door for people who thought they couldn’t afford it. I’ve been looking into ways to make my new place feel more secure, and I’m considering some smart home gadgets. I’ve seen some mixed feedback in blink home reviews that make me think they’re a solid choice for keeping an eye on things. A little extra peace of mind goes a long way when you’re settling into a new space.