If you don’t have enough cash to put down a 20 percent down payment, not all hope is lost! There are other kinds of mortgages you can take out.
To purchase a home, you may have heard that you need to make a 20 percent down payment. This myth has been so widely circulated that it’s believed to be true. Luckily, a myth is all it is. While it is true that a 20 percent down payment will see you paying less money over time, it’s not a percentage that you need to adhere to, and not one that mortgage lenders should expect you to pay. There are other kinds of mortgage loans that you could qualify for that will allow you to pay a much, much lower down payment. That way, if you’re low on cash, you can still purchase your very own home!
Conventional Mortgage: 5 Percent Down Payment
Fannie Mae and Freddie Mac now allow borrowers to get a loan to purchase a primary resident with as little as 5% down payment. So discuss this option with your mortgage broker.
FHA Mortgage: 3.5 Percent Down Payment
The Federal Housing Administration (FHA) is part of the government’s Housing and Urban Development (HUD) agency. Their mission is to create sustainable and inclusive communities with quality and affordable homes for everyone, and it’s been doing so for decades. There are requirements that the insured must meet, but they if they do qualify then they only need to put down 3.5 percent.
USDA Rural Home Loans: No Money Down
The Rural Home Loans is actually a misnomer, you don’t have to settle in the middle of some nowhere rural town to qualify for this, it’s actually available in suburban neighborhoods as well. Homebuyers can finance up to 100 percent of a home’s purchase price and, in some cases, finance the cost of energy-efficient improvements to said property.
VA Loans: 100 Percent Financing
There are loans specifically crafted to help those that have served in the military that don’t require the 20 percent, but instead are 100 percent financed and are sensitive to the needs of military families.
20 percent down payments aren’t required, so it’s a good idea to know your other options. For all of your home loan needs throughout Solana Beach and San Diego County, as well as all of California, contact Elvin Wesley at Ranch & Coast Mortgage Group Inc. We have the experience needed to make sure you get the right mortgage.
