How Much Do I Need To Save for My Down Payment?

Mortgage and Lending with First Heritage Mortgage NMLS #: 938761

Are you thinking about jumping in to the Richmond VA real estate market, or any other real estate market? Have you been squirreling away money for the past few months or even years to meet minimum down payment requirements? Not sure if you have enough yet?

The question about minimum down payment requirements is probably one of the top five I am asked from first time home buyers. I am also surprised to hear that many of them think a 10% or 20% down payment is the minimum based on something they once heard or read on the internet. In fact, in the state of Virginia, you can buy a house with as little as 0% down with VHDA’s FHA Plus Loan. One hundred percent financing is also available with VA and USDA mortgage loans, so buying a house isn’t as unattainable as some people may think.

Here’s an overview of minimum down payment percentages by loan product for owner occupied borrowers:

Conventional- 5% down (was increased from 3% to 5% in November 2013)

FHA- 3.5%

USDA- 0%

VA- 0%

VHDA/FHA Plus- 0%

If you are buying a home as an investor or buying a second home, minimum down payment requirements will be 10% or 15%. Minimum down payments are also higher for some jumbo mortgage products.

All of that being said, just because you can buy a house with 0% down doesn’t mean you should. Without any equity in your property, you are certainly exposing yourself to more risk if home values decrease and you need to sell. However, with interest rates still very low, it could also be costly to delay your home purchase much longer as rates are expected to rise more in the future.

Decided you’re interested in taking the leap into homeownership? Contact me, your Richmond VA mortgage lender, today! Also, be sure to visit my Homebuyer Tips page for advice on how to prepare to buy your home.

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