If you’re looking to purchase a beautiful new house, it’s not as hard as you think. While 20 percent is touted as the norm for a down payment, there are options available that require little to no down payment.
One of the main considerations is the type of loan you acquire:
- Fannie Mae or Freddie Mae
For Fannie Mae or Freddie Mac conventional loans, you’re looking at between 5 and 10 percent. In some cases, Fannie Mae’s 3-percent program will apply.
- FHA
The minimum down payment is 3.5 percent of the purchase price and these loan options are great for new home buyers who have little or bad credit.
- VA and USDA
These loans are guaranteed by the U.S. Department of Veterans Affairs, and the U.S. Department of Agriculture respectively and do not require a down payment.
Whether you have a down payment or not, mortgage insurance will play a role in any loans that have low or no down payments.
In fact, the VA has a funding fee. The rules are a little different with new condos and custom-built homes, so speaking to a realtor can point you in the right direction.
In every scenario, getting prequalified provides you with information on how much you will need to put down. This will clear up any confusion while empowering you to move forward with confidence.