When buying a home, itโs easy to focus solely on the purchase price, but there…
How to save for a down payment
It might seem like it will be costly to purchase a home, and you might think that you will have a considerable down payment. Oftentimes, because people think that they cannot afford their down payment, theyโre forced to keep renting. Although you might think that itโs impossible to afford your down payment, it might be more possible than youโd think.
How Much Should I Save for My Down Payment
Prospective homebuyers often think that they need to have 20 percent down on their house before they purchase it. Although this number is probably ideal, you donโt need to put down 20 percent, as you can find ways around this number. In actuality, many mortgages offer buyers a much more manageable minimal down payment.ย Here are some ways that you can finance your down payment if youโre concerned about covering it:
Conventional Loans
When you use a conventional loan, youโre able to put down small payments, usually around 3 percent. Therefore, if youโre purchasing a home that is around $300,000, youโre only going to have to put down $9,000. Itโs important to note that even if you opt for this choice, youโre going to have to pay for private mortgage insurance if you own less than 20 percent of the equity in your home.
FHA Loans
The Federal Housing Administration offers loans that allow you to put 3.5 percent down on a home. So, you could put down around $10,500, if youโre purchasing a $300,000 home. Remember, to qualify for these loans, youโre going to have to have relatively good credit, around 580.
VA and USDA Loans
If youโre using a loan from the United States Department of Veterans Affairs, you donโt have to put down any kind of down payment. Moreover, if you qualify and decide to use a United States Department of Agricultural loan, you donโt have to pay a down payment, either.
If youโre ready to help your clients make steps towards homeownership, then Vonk Digital can help. Weโre committed to helping people in the mortgage industry create websites that highlight the strengths of their businesses. For more information,ย contact us.