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One of my favorite things about being a mortgage loan officer is answering questions from our members. Even though I have over 25 years of experience in the mortgage industry, I am constantly learning. Your questions help me to stay on top of the latest information.
Q: I’m looking to buy my first home. I’m currently paying $1200/month rent and have saved $12,000 for my down payment. Each month I am adding $400 to my savings for an additional down payment. I’ve seen a house I am interested in that is listed for $210,000. Is it possible to buy now or will I need to wait until I have a 20% down payment?
A: Excellent question. It is commonly thought that you need to have a 20% down payment to purchase a home. That is not true. Many programs allow for a smaller down payment. First-time homebuyers may qualify for conventional financing with as little as 3% down. If qualified, there are grant programs available to assist with down payment and closing costs. Qualified Veterans may be eligible for 0% down. Your monthly mortgage payments will be higher with a smaller down payment; however, I would still recommend buying now, in fact, waiting to buy until you have saved a 20% down payment can be costly.
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