Buying a home is a significant financial commitment. In fact, for most people, it will be the single biggest financial purchase of their lives. And that’s not just because of the mortgage payment. There is also the matter of the money you put down, at closing. It is generally accepted that you must make a down payment before you can buy a home, and that you have to ensure that the payment is at least 20 percent of the total home purchasing price. However, this is not always the case.
The Truth About Down Payments
Certainly, making a down payment is recommended, and it can help you keep your monthly mortgage payments lower. For buyers who simply don’t have cash on hand for a down payment, though, there are home loan products that will enable you to get a house without putting money down. The most common example is the VA loan, available only to veterans and their families, but there are some other types available, too. If you think this is a road you want to go down, you might ask your loan representative about it.
As for the question of how much a down payment should be, 20 percent is the industry standard and it’s what most loan officers will recommend. It’s not a necessity, though, and some loan products will enable you to make very small down payments—making a real investment in your new property without breaking the bank. For example, Loan Fleet offers a solution for buying a home with just three percent down!
Our Three Percent Solution
Indeed, the well-known FHA loan, which typically does require a larger down payment, is not the only option available to buyers. Loan Fleet offers a conventional three percent down loan. Here’s what you need to know about it:
-Anyone can potentially qualify for a down payment of just three percent—including first-time homebuyers.
-This loan allows you to reduce or even eliminate your monthly mortgage insurance.
-Generally speaking, it provides a faster and easier solution than FHA loans—and with lower monthly payments, too!
-You can also use gift funds for your entire down payment.
The bottom line for potential buyers is that there are real options available to you and it pays to know what they are. Some of the best solutions might involve lower payments and smaller down payments. If that’s what you’re looking for, you shouldn’t settle for less.
Contact Loan Fleet today to learn more about the different loan options we provide, including ways to move into a new place with just a three percent down payment!