Have you been thinking about buying your first home or moving up into a bigger or nicer one? Do you know how much you’re going to put down, or what programs you can qualify for with that down payment? Velocity Lending is your local home loan expert and we’re here to shed some light on down payments for home loans. We’re going to go over the least possible and the average down payment, as well as all the different program requirements to qualify for certain types of mortgages. The down payment you make on your home will impact what loan programs you qualify for, as well as your monthly payment.
To begin, we’re going to explain what a down payment is. This is going to be the amount that you invest initially into your home when you go to closing. Some loan programs will allow you to invest $0 into your home, and we will get more into these options later. Some loan programs are going to require 3%, 5%, 15% or even 25% of the home price as a down payment. The national average down payment is around 12%, so for a home with a $400,000 purchase price, you’re going to be putting about $48,000 into the home at closing.
Now, let’s get into the down payment requirements for different loan programs. Conventional loans are going to allow for a 3% down payment if you are a first-time homebuyer. However, if it is not the first time you’ll be purchasing a home, you’re going to have to put down 5%. FHA loans are going to allow buyers to put down 3.5% down. If you were or are a member of the military, you can get into a home loan with 0 down. And, if you’re looking at rural areas, you can apply for a USDA loan that asks for 0 down as well.
Overall, buyers have a wide range of options for how much they need to put down on a home. Speak with a knowledgeable, local mortgage broker at the Velocity Lending office to help you figure out with program will work best for you and your goals today. We’re here for you!