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Down Payment Questions Answered

Tuesday, March 21, 2017   /   by Susan Hope

Down Payment Questions Answered

Do I have need a 20% down payment to purchase a home?  I’ve heard I can buy a home with only 3% down payment.


One of the biggest hurdles to purchasing a home that I hear from new homebuyers is the down payment.  So many homebuyers believe that they need a 20% down payment but in fact, there are many loan programs that enable buyers to purchase a home with as little as 3% down or even zero for those who qualify.

There are various qualifying factors such as income or credit score, but here are some loan programs you might want to consider:

FHA Loans: With more lenient qualifying factors, FHA (Federal Housing Administration) loans have been specifically designed to help borrowers with limited assets to buy homes.  Down payment can be as low as 3.5% but mortgage insurance will be required.

VA Loans:  The VA Loan provides affordable home financing and more lenient qualifying guidelines for veterans, active duty and surviving spouses.  100% financing available – no down payment required.

USDA Loans: These are government insured loans provided to low or moderate income homebuyers on rural properties located outside of major metropolitan areas.  Zero down payment is required.  You might be surprised to learn that most of Snohomish County qualifies as “rural”.  (Check property eligibility on USDA website)

Home Possible:  An alternative to the FHA loan, this program is designed to help low-to-moderate income borrowers purchase one to four unit owner-occupied homes.  Allows a down payment as low as 3% and lower mortgage insurance premiums than FHA.

Home Ready:  Similar to Home Possible, but Home Ready also allows for household income to help qualify.  Down payment can be as low as 3% and lower mortgage insurance premiums than FHA.

Additionally, you can also use Gift Funds from a family member, friend or colleague that is willing to help you purchase a home.

If saving for a large down payment is the only thing stopping you from your dream of homeownership, reach out to me to see if any of these options are right for you.  You may already qualify for one of these programs.

Rosa Briggs, Sr. Mortgage Advisor

American Pacific Mortgage

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