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How much do I need to save for a down payment?

If you’re wondering how much you need to save for a down payment or struggling to save at all – you are not alone.  Saving for a down payment is one of the biggest obstacles to buying a home.  That’s why you have so many options to help you overcome it.

Today, saving for a 20% down payment may take 7 years or more.  However, the average down payment on a house is only about 6% of the purchase price.

Low Down Payment Options

No Down Payment

VA Loan – available to qualifying Veterans and active-duty military

USDA Loan – available in select Rural and Suburban areas

Low Down Payment

FHA Loan – down payments ranging from 3.5% to 10%

Fannie Mae HomeReady – down payments as low as 3%

Freddie Mac Home Possible – down payments ranging from 3% to 5%

HomeFundItTM

Online down payment gifting platform where friends and family can contribute to your down payment using debit or credit cards.  Visit www.homefundit.com

Types of Down Payment Assistance

Grants

Funds that you do not have to pay pack if you own and occupy your home for a certain period of time.

Second Mortgage Loans

Typically have low or zero interest rates and the payments are deferred for an initial period of time.

Tax Credits

Some state and local governments, including housing finance agencies, issue mortgage credit certificates to reduce the amount of federal income tax you pay at tax time.

How much is too much for your down payment?

Even if you’ve saved enough for a 20% down payment – or more – you don’t want to pour all your savings into your home purchase.

Don’t forget these costs:

  • Closing Costs – range from 2% to 5%.
  • Homeowner’s Insurance – varies depending on the type of home and location. Flood insurance is typically sold separately.
  • Homeowner’s Association Fees – not applicable in all situations.
  • Home Maintenance – depending on the age of your home, there may be repairs or renovations to complete right away
  • Unexpected Costs – owning your own home means you can’t call the landlord anymore! Replacing the HVAC or plumbing can be expensive!
2019-10-09T08:06:42+00:00