It used to be that homebuyers had to put down 20 percent of the property’s value when buying. This is no longer true, which makes homeownership a more achievable goal for many. Every financial situation is unique, however, so there’s no single down payment strategy that works for everyone. Consider your options to decide how you want to purchase real estate.

Which Real Estate Down Payment Option Is Best for You? 

1. Low Down Payment Mortgages

If you have good credit, you can likely secure a mortgage with a low down payment. Some conventional loans may take down payments as low as 3%. These will require Private Mortgage Insurance coverage. Government-backed loans such as the Department of Veteran Affairs and the Department of Agriculture offer no down payment loans to qualifying individuals. Federal Housing Administration loans may accept payments as low as 3.5%.

2. Gifts

Gifts are common for younger, first-time home buyers. If a family member or close friend wants to help you purchase your home, you can use their gift toward the down payment. They will need to provide bank statements to your lender showing that they have the financial ability to provide the donation. They also need to include a letter explaining that the donation is a gift—and not a loan. If it’s a loan, it will impact your debt-to-income ratio, which may mean you no longer qualify for the mortgage.

3. Assistance Programs

There are state and local down payment assistance programs that may be worth looking into. These programs offer assistance with grants or zero-interest loans. Because these programs usually apply to a certain area, you will need to match the program to a specific property, location, and price point. Each program usually has a maximum sale price and income limit to qualify, but they don’t necessary only apply to low-cost housing.

Along with considering financing, you will need a real estate agent on your side before you buy a house. The Helping Hands Real Estate Team will guide you through every step of your purchase in Chandler, AZ, and the surrounding area. Their financing experts can help you plan a down payment strategy and find the right real estate loan. Start browsing properties online, and call (480) 385-9107 for assistance.