How Much of a Down Payment Do You Need?

How much down payment do you actually need for a Primary home that you intend to live in? To make a long story short, no you don't need 20% down to purchase a house! There are so many mortgage programs that allow very minimal down payments. Keep in mind however, the more down payment you do put, the more attractive you'll look to lenders and to sellers. Let's talk more about the different programs available and what the general down payment requirements are for each. Here's a ranking of down payments for each mortgage program in order of lowest to highest for Primary, Owner-Occupied Homes: 1. VA Mortgage: 0% Down Payment Required.

Who's Eligible: Available to eligible veterans, active-duty service members, and certain surviving spouses.

2. USDA Mortgage: 0% Down Payment Required.

Who's Eligible: Rural-area properties only and income restrictions. 3. Conventional: 3% Down Payment Required, 5% for Multi-Family. Who's Eligible: First-time Home Buyers with a Minimum Credit Score of 620. Lower-Income Applicants. 4. FHA Mortgage: 3.5% Down Payment Required.

Who's Eligible: Minimum Credit Score of 580.

5. Non-Qualifying (No Tax Return) Mortgage: 10% Down Payment Required, 20% Down Payment Preferred.

Who's Eligible: Self-Employed and Business Owners established for at least 2 years. 680 Credit Score Preferred.

In conclusion, the 20% down payment requirement is outdated in today's real estate market. However, it is important to note that a higher down payment strengthens your offer to sellers and reduces your monthly payments. It's also crucial to recognize that down payment funds are just one aspect of home buying costs. There are additional expenses for closing which include taxes, insurance, title fees, and more. We will address in a future blog post.