The home buying process is full of countless details, but one of the most important aspects is the dollar amount of your down payment. This number has a significant impact on how much you need to save, as well as the kind of mortgage loan you will qualify for. While 20% used to be the ongoing standard for prospective homebuyers, this number has since changed.
The expert loan officers at Premium Mortgage Corporation have helped numerous clients in upstate New York and Barre, Vermont, achieve their goals of homeownership by providing alternative down payment options for tight budgets.
The minimum percentage you put down largely depends on what you can afford and the mortgage loan you select. Though conventional loans require buyers to make a down payment of at least 10–20%, some merely request 5%. If you are eligible for an FHA loan, you only need to put down 3.5% to become a homeowner. VA and USDA loans go one step further by eliminating the necessity of a down payment altogether.
Before you decide to put down less than 20%, keep in mind you’ll need to buy private mortgage insurance. Also, your lender may charge extra fees at closing. The size of your down payment is likely to affect the interest rate for your mortgage loan, with smaller down payments resulting in slightly higher percentages.
Although there are several advantages to saving for a higher down payment, choosing to put down the minimum percentage for your mortgage loan will allow you to quickly become a homeowner and keep additional cash in the bank for unforeseen expenses. Contact Premium Mortgage Corporation at (585) 241-0000, or visit them online to find the location nearest you.
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2541 Monroe Avenue, Rochester, NY 14618
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