How much for down payment?

It really depends on your situation. Are you a first time buyer, move up buyer or an investor? Here are some guidelines for each:

First-time home buyers- First time buyers have many options.

VA Buyers- Can put Zero down and the seller must pay the closing cost

FHA Buyers- May put down as little as .5 %( 1/2 of 1 percent) to 3.5% and the seller may pay u to 6% of the closing cost. There are FHA grant programs out there that will “grant” 3 % of the down payment to the FHA buyer and it never has t be paid back.  This leaves only .5% for the buyer to put down.  That’s only $1,500 on a $300K property.  There are restrictions on this grant regarding income but it’s an awesome deal for the first time buyer.

Conventional First time Buyers- Can put down as little as 5% of the purchase price. Generally speaking though, conventional buyers put 10% plus down and have better finance rates.

Non-First Time Buyer

The “non-first time buyer”, someone who has not owned a home for the last 3 year or is selling one home and purchasing another , will likely be going with a conventional loan which usually requires at least a 5% down payment, but typically 10-20% down.

Investors

An investor is typically one who will not be living in the property and is purchasing it to flip or rent out.  Their down payments usually start at 25% and go up from there.

Even though there are no “zero” down loans available, you can still get pretty close with the FHA 3.5% down loan, a grant for 3% of the down payment and the seller paying your closing cost. Pretty nice considering home prices are much more reasonable now. In fact many people are purchasing homes for about what they are paying for rent. We haven’t seen those days in a long time!  If you have any questions about down payment, don’t hesitate to contact us at 323-216-9671