If you’re concerned about the added expense of private mortgage insurance, then this one isn’t really a myth. If you have less than 20 percent equity in your new home, the lender will tack on an insurance premium that could cost between 0.3 percent and 1.5 percent of the loan amount (according to Investopedia). The good news is that the premium payments are typically tax deductible and you can stop buying the insurance when the loan balance reaches 80 percent of the home’s original value.
While most homebuyers use conventional loans with a 20 percent down payment requirement (according to Ellie Mae), the fact is, you can purchase a home with as little as zero down, if you’re a member of the military, a veteran or surviving spouse or if you purchase a rural home with the USDA mortgage program.
If you don’t qualify for those programs, speak with us about the FHA-backed loan or the Freddie Mac Home Possible® and Fannie Mae Conventional 97 programs. If you qualify, you may be able to purchase a home with as little as a 3 percent down payment.
Then, there are all of the federal, state and local down payment assistance programs that you may qualify for. If you do, you’ll receive much-needed help with paying your down payment and/or closing costs (don’t forget, closing costs can be significant).
Buying your first home can be overwhelming. Let us help! We are committed to finding you any grant monies or assistance programs available to you. Our buyer agent services are FREE! Please contact us for more information. We have assisted hundreds of first time home buyers and look forward to the opportunity to assist you!