When it comes to obtaining a home mortgage to purchase a home, there are different requirements for a down payment depending on the type of loan you take and whether or not you intend to occupy the home.
FHA Loans
FHA loans have a minimum 3.5% down payment for the purchase of a new home. If you make a 5% down payment however, your mortgage insurance costs goes down slightly on a 30 year fixed FHA mortgage from .85% annually to .80% annually.
VA Loans
VA loans require no down payment. However, if you are obtaining a VA loan and not receiving VA disability benefits there will be a 2.15% funding fee for using a VA loan for the first time and 3.3% for using your VA loan a subsequent time. With a 5% down payment, the VA funding fee is reduced to 1.5%. VA loans also never have mortgage insurance, regardless of down payment.
Conventional Home Loans
Conventional home loan down payment vary depending on your occupancy. If you are a first time home buyer who is purchasing a primary home to live in, the down payment minimum is 3%. If you are a non-first-time home buyer purchasing a home to live in, the minimum down payment is 5%.
On the other hand, if you are purchasing a home as a second/vacation home, the minimum down payment is 10%. And if you are purchasing a home as an investment property, the minimum down payment is 15%. In addition, with anything less than a 20% down payment, there will be mortgage insurance on a Conventional loan.
Also, another important item to consider is that in addition to the actual down payment, a home buyer must also factor in settlement charges and closing costs, which will vary by lender.
As always, everyone’s situation is unique and to properly look into your specific situation, make sure and consult with a licensed local lender such as Strategic Mortgage.
For more information on current home loan programs and options for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com
Strategic Mortgage, LLC – AZBK#0909514 - NMLS#158804 - Equal Housing Lender
Vasilios Kamboukos – NMLS#160440
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