Monthly Archives: August 2023

How to Get a Mortgage with a Low Down Payment

Posted on by
Reply

Money bag with the word down payment. Payment used in the context of the purchase of expensive items such as a car and a house, whereby the payment is the initial upfront portion of the total amountGetting a mortgage with a low down payment can be a great option for those who want to become homeowners but don’t have a large amount of savings. There are several programs available that can help make homeownership more accessible.

Here are a few options:

  1. FHA Loans: The Federal Housing Administration (FHA) offers loans with a low down payment requirement of as little as 3.5% of the purchase price. These loans are popular among first-time homebuyers and those with lower credit scores although you don’t have to be a first-time homebuyer to qualify..
  2. VA Loans: If you are a veteran or an active-duty service member, you may qualify for a VA loan. These loans are guaranteed by the Department of Veterans Affairs and often require no down payment at all.
  3. USDA Loans: The United States Department of Agriculture (USDA) offers loans for rural and suburban homebuyers with low to moderate incomes. These loans require no down payment and have flexible credit requirements.
  4. Conventional Loans with Private Mortgage Insurance (PMI): Conventional loans typically require a down payment of at least 3%. However, if you can’t afford a 20% down payment, you can opt for a conventional loan with PMI. PMI is an insurance policy that protects the lender in case of default, allowing you to put down a lower down payment.
  5. State and Local Programs: Many states and local governments offer down payment assistance programs to help first-time homebuyers. These programs provide grants, loans, or tax credits to help cover the down payment and closing costs.

When applying for a mortgage with a low down payment, it’s important to consider your financial situation and choose the program that best suits your needs. It’s also a good idea to work with a knowledgeable mortgage lender who can guide you through the process and help you find the best options available to you.

If you are purchasing a home or looking for a new mortgage, call Ruth. Ruth Schoenherr is a mortgage broker who will help you find home loans in the Clearwater and Tampa Bay area, and serving all of Florida. For more information, go to her web site at www.ClearwaterMortgageBroker.net or call at 727 447-2418.