Home buyers all run into that part – when they have to write a check. It’s never fun, but it’s a necessary part of home ownership, the dreaded down payment. For years, the only way to buy a home was to put down 20% of the home’s value as a down payment, giving the bank assurances that you have the financial wherewithal to pay the mortgage. Now, there are multiple ways to get your down payment, and different levels to hit. So, what do you need for a down payment?
Like we said, a down payment is typically 2-%. That’s a Conventional loan, and is the loan with the least strings attached.
Many homeowners have trouble hitting this mark, though. That’s where other programs have stepped up to help. You can own a home with no money down if you are a veteran of the U.S. military, or one of their spouses, with a VA loan. If you didn’t serve, the FHA loan is a great alternative.
FHA loans are government-backed loans from the Federal Housing Administration that were designed to let people buy homes with a lower barrier to entry. Securing an FHA loan means that you are only required to put down a 3.5% payment to move in. This lets many people who are not able to buy a home traditionally live the dream of home ownership.
So, the answer to “What do you need for a down payment?” isn’t as cut and dry as it was years ago, when the 20% would often come from a loan from parents, and it was easier to save. Home ownership is open to thousands more families, and that’s a good thing.
If you are ready to buy or sell your home, call Rick and Tracy Ellis of Keller-Williams Realty today to get the best deal! We have 20 years of experience buying and selling homes in the St. Louis area, and nobody will get you a better deal on your home. Call us at (636) 299-3702, email Tracy at firstname.lastname@example.org or Rick at email@example.com or visit www.tracyellis.com to learn more. You can also listen to us every weekend on FM News Talk 97.1, Saturdays at 4 p.m. and Sundays at 10 a.m.