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
