One of the biggest hurdles people face in their quests for home ownership is coming up with the down payment.
For a standard, traditional loan, you could need as much as 20 percent of the home’s purchase price as a down payment – and in many cases, that translates to tens of thousands of dollars.
Fortunately, you may not need to come up with such a large sum. In fact, there are several types of loans that you may be eligible for that don’t require a 20 percent down payment.
Loans That Don’t Require 20 Percent Down
In order to use a VA loan, you must be currently in the military or have been honorably discharged from the military.
With a VA loan, you can obtain financing with nothing down. If your loan is backed by the VA, you don’t need to buy private mortgage insurance – and that can save you a significant amount of money.
With an FHA loan, you’ll usually need to come up with at least a 3.5 percent down payment. On a $200,000 home, that totals $7,000. Those are typically the requirements for borrowers with a credit score of 580 or higher. However, if your credit score is between 500 and 579, you’ll likely need to come up with a 10 percent down payment (which is still much more reasonable than the standard 20 percent).
The Low-Down on Low-Down-Payment Loans
Naturally, lenders all have their own requirements. You can – and should – shop around for the best mortgage rates.
Are You Buying a Home in the Tampa Bay Area?
Call us at 727-584-8480 or 813-961-6000. If it’s easier, you can also contact us online.