How To Buy A Home With A Small Down Payment
January 3, 2022 | amandasearlerealtor
You’re ready to stop living in a rented apartment or home, but you don’t have much money to put down on a home. Maybe you have some money saved, but not nearly enough to make a 20% down payment on the type of home you’d really like to own.
If you don’t have much money for a down payment you can still own a home. There are ways to get approved for a mortgage with a small down payment. Here are some of the possibilities when you’re short on funds for your down payment.
First-Time Homebuyer’s Programs
When you are a first-time homebuyer, it can be difficult to come up with the necessary down payment. You don’t have a home with equity built up that you can sell to give you a good down payment on your next home.
However, there are programs, such as the Head Start to HOME Ownership program will help you buy a home. The H2H Program will allow those qualifying to make down payments under $1,000 for their new home in Duval County. There are some restrictions and qualifications, but this is one way to get a home with a smaller down payment.
There are other first-time homebuyer programs available in the Jacksonville area, as well. Some may qualify for the Habitat for Humanity program, while others may qualify for a Homeownership Voucher Program or a down payment assistance program. Your real estate agent will be able to provide more information on the programs available for down payment assistance in Jacksonville, Florida.
VA Loans and Navy FCU Loans
Veterans can take advantage of the VA loan programs providing low and no down payment options. You may have to pay a funding fee, but it can be as low as 2.15% and doesn’t exceed 3.3%. These loans also come with the benefit of no mortgage insurance and the ability to roll the funding fee into the loan.
Along with the VA loans, Navy Federal Credit Union offers a 100% financing option for qualifying members buying their primary home. You will need to be a member, which is restricted to military, the US Department of Defense, some civilian employees of the military and family members.
The USDA Program for a no down payment mortgage is a good choice, but many buyers skip it because they think the property has to be farmland. This isn’t true and many areas where the program is eligible are not really rural areas.
These loans come with no mortgage insurance, but you will have to pay a 2% upfront guarantee fee, which can be rolled into the loan.
Other ways to buy a home with a small down payment include:
- FHA loans
- Other Local Homebuyer Programs
- Finding an Additional Source for your Down Payment
- An Excellent Credit Rating and the Right Lender
There are many ways to get into a home without putting down 20% or even 10% of the purchase price. When you are ready to buy, speak with a professional real estate agent first. They will be able to direct you to the best programs in your local area and for your specific situation.