This is the fourth installment in an ongoing series on mortgage basics. On my mortgage website, I cover a host of topics on my frequently asked questions page. Since this is the most popular page on my site, I thought it might be a nice way to begin my blog. You can find the entire list of FAQs here: Arizona Mortgage Pro FAQs. I will continue this series covering one topic per post.
What is the least amount of money I can put down for a home purchase?
The minimum down payment differs depending on the type of loan you choose. The lowest down payment available is 0%, which would require either a VA or USDA loan. VA loans are guaranteed by the Department of Veteran Affairs and are available only to men and women who have served in the military and their spouses. USDA loans are made available by the United States Department of Agriculture for lower income families in rural areas. Both the borrower and the property must be eligible for this program.
The next lowest down payment available would be FHA loans. The Federal Housing Administration insures these loans and the minimum down payment is 3.5%. They are widely available and the low down payment makes them very popular with first time home buyers who don't have a large amount to put down on a home.
Conforming loans are those loans that meet Fannie Mae and Freddie Mac guidelines for eligibility. These are also very common and typically have some of the best rates. The minimum down payment for these loans is 5%.
There are other factors when deciding which loan type to choose beyond down payment. Some of these loans will have monthly mortgage insurance, some have upfront fees, and others require specific conditions to qualify. For help in deciding which loan works best for you, call, chat or email to get a free, no obligation consultation.
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