Many first time home buyers believe they have to put 20% to purchase a home. But that’s far from true. In fact, the average down payment for first time home buyers is only 6%. On a $500,000 home purchase, that would be just $30,000.
And, there are loan programs that let you buy with even less than 6% down. For example:
- FHA loans — 3.5% down
- VA loans — 0% down
- USDA loans — 0% down
- Conventional 97 loans — 3% down
Some of these programs have special requirements, and others are available to the general public. I’m happy to recommend a lender to help you determine which program works best for your situation.
The main takeaway here is that down payments are flexible.
Your down payment should depend on your income, what you currently have saved, the price of the home, and what your overall home buying goals are.
Briefly, the pros and cons of bigger versus smaller down payments are:
- Bigger down payment = lower interest rate
- Bigger down payment = lower monthly payment
- Smaller down payment = stop paying rent, buy a home sooner
- Smaller down payment = start building equity faster
So take a look at your own finances and home buying goals to figure out the right down payment for you. If you’d like to discuss your buying options or would like a lender recommendation, please give me a call at 703-963-0142. Email works too. email@example.com