Down Payment
There are many options when it comes to the down payment on a home purchase. You CAN put 20% or more down but you don’t have to. There are options from 0% down payment to down payment assistance programs.
A VA loan is available for qualifying veterans, active duty, and widows. The VA loan allows you to borrow 100% of the home’s value without adding mortgage insurance to your monthly payment.
**requires a funding fee
An FHA loan allows for as little as 3.5% down payment. This is a government-insured loan and requires upfront mortgage insurance as well as a monthly mortgage insurance payment.
A conventional loan allows for as little as 3% down payment, in some cases. This is not a government loan and does not require upfront mortgage insurance but it does require a monthly private mortgage insurance payment when any amount less than 20% is used for a down payment.
Down payment assistance is available to those who qualify. There is more than one source for down payment assistance and the terms vary by program.
A USDA (United States Department of Agriculture) guaranteed loan helps buyers purchase a home, with zero down, in rural areas. This is a government-insured loan and requires upfront mortgage insurance as well as a monthly mortgage insurance payment.