Do You Really Need a Down Payment?
With all of the recent hoopla in the press and crack down on lending institutions, yes, zero percent down financing is a thing of the past. But how much down payment is really required? I've heard buyers say, "I know I need 20% down", well I'm here to tell you that just isn't so!
Many buyers are electing to use FHA financing because it requires the smallest down payment and offers a very competitve interest rate. As of January 1, 2009, FHA will require 3.5% of the purchase price as a down payment. That's not so bad, especially when the rates are near 5%! Do you know that your down payment can also be a gift from a family member? That's right, if mom and dad would like to contribute, all they have to do is write the lender a letter stating that they are giving you the down payment as a gift!
Although sellers are no longer allowed to contribute to a buyer's down payment, they can pay the buyer's closing costs, and many are willing to do just that in order to close the deal. So you see, for a $100,000 home, the down payment required could be as little as $3500 (zero if you have a relative willing to foot the bill for you) and zero closing costs! It's a fantastic time to buy a new home!