While a lot of people believe that you need to put 20% down to purchase a home, that is simply not the case. Many loan programs offer as little as 5%, 3% or in some cases no money down. Your Real Estate Agent will connect you with a loan office during your homebuying process.
Different types of loan programs:
Conventional Loans: This is the most commonly used type and usually has the best interest rates. You will typically need at least 5% for a down payment and first time buyers could be eligible for only 3% down. Common terms for conventional loans are for 15 or 30 years.
FHA Loans: An FHA loan is a mortgage loan that is insured by the Federal Housing Administration (FHA). Essentially, the federal government insures loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on their mortgage payments. The FHA program was created in response to the rash of foreclosures and defaults that happened in 1930s; to provide mortgage lenders with adequate insurance; and to help stimulate the housing market by making loans accessible and affordable. FHA loans can have down payments as little as 3.5%.
VA Loans: A VA loan is a mortgage loan in the United States guaranteed by the U.S. Department of Veterans Affairs (VA). The loan may be issued by qualified lenders. The VA loan was designed to offer long-term financing to eligible American veterans or their surviving spouses (provided they do not remarry). Down payments can be as low as 0% down.
USDA Loans: The United States Department of Agriculture (USDA). There are several benefits of a USDA loan, including flexible credit underwriting requirements and no down payment required. The USDA Mortgage Loan can only be used in designated areas & towns, but their definition of rural may be more flexible than you think.
Terms and conditions for all loans will be determined by eligibility upon application for a mortgage. Please head over to our Mortgage Lender page for more information.