Q&A


Eyal Tropen - Sr. Loan Officer

NMLS # 874253

Low Down Payment Options to Help Home Buyers

One of the obstacles that keep homebuyers out of the housing market is the misconception that they need to have a 20% down-payment*. As housing prices keep rising, saving up a 20% down payment* can seem like Mission Impossible… If you trying to save up to buy a home, you should know that there are plenty of low down payment options for you!

What’s a Down Payment?

The down payment is the portion of the home price that you pay out-of-pocket, rather than financing it - most lenders require that some percentage of the purchase price be paid at the time of closing. Though a 20% down payment* will allow you to avoid paying Private Mortgage Insurance (PMI), the average down payment size for borrowers is typically in the range of 5-10%.

 

How can a Low Down-Payment Help You?

Being able to make a low down payment can benefit you in a few ways:

  • You may be able to buy a home sooner since you’ll need less money down, and avoid price increases.
  • You may be able to afford a higher priced home if the down payment is no longer an obstacle.
  • A low down payment lets you use more of your money toward closing costs, renovations, or new home expenses such as furnishing.

Low Down Payment Programs

I am proud to offer several loan programs that allow low down payments, which help home buyers like you. Here are some options:

  • FHA Loans: Allow down payments as low as 3.5%*
  • VA Loans: Intended now or in the past have served in the US Armed Forces. These loans allow No money down* up to the conventional county lending limit, and a low down payment of only 25% of the difference above that*
  • USDA Loans: No money down* to assists low- and very-low-income applicants obtain decent, safe and sanitary housing in eligible rural areas
  • Fannie Mae and Freddie Mac Loans: First Time Homebuyers (or those who did not own a home in the past 3 years) may be eligible for down payments as low as 3%*.

If these more conventional options don’t provide an answer to your situation, we can expand with more creative solutions and specialty programs that can help in more complex situations:

  • Gift Funds: Although many mortgage programs require a minimum investment form the borrowers’ own funds, most allow the use gift funds received from family members, and even from friends to cover most - or even the entire down payment.
  • 100% Financing is also possible with Down Payment Assistance (DPA) programs (AKA “bond” loans), such as from the Washington State Housing and Finance Commission (WSHFC)
  • Jumbo-Solutions: Large Jumbo loans are harder to qualify for… Splitting a jumbo loan to a conventional first and a smaller 2nd mortgage may have a lower bar to qualify, and thus help you afford a higher priced home.
  • No MI Advantage: These specialty loans do not require PMI, even with down payments below 20%*. While interest rates are usually higher for this program – the total monthly payment may be lower, making it more affordable.
  • Still having Trouble Qualifying? Try the Expanded Access Specialty Loan Program – specifically designed for those who just don’t fit the mold…

Down Payment Saving Tips

Now that you know you have several low down payment mortgage options, you can focus on saving up the amount you really need. Saving up a down payment doesn’t have to feel like such a chore. Try a few of these saving tips:

  • Set up an auto-transfer to a separate savings account for a set monthly amount. Chances are, when it happens automatically, you won’t even miss those extra dollars.
  • Adjust your monthly bills - try going without Cable or satellite TV, or switch to a less expensive package.
  • Ask your insurance agent how much you can save by increasing car insurance deductibles, or adjusting coverages.
  • Skip eating out for a month, and put all the money you saved toward your down payment.
  • Put your tax refund, bonus pay, and any other unexpected monetary windfall toward your down payment savings.

Achieving your homeownership dream may be just around the corner! So, start saving your dollars, research your low down payment options – give me a call to find out which programs may be right for you – remember, not all lenders carry all these programs, make sure you are working with a licensed professional who can help you plan ahead for your purchase.

*There may be qualifying factors. Please visit my Disclosures page for more details on loan types.



Copyright © 2018. Eyal Tropen NMLS # 874253
Residential Mortgage Loan Originator Licensed in CA, OR, TX, WA

American Pacific Mortgage | NMLS #1850
625 4th Avenue, Kirkland, WA 98033 | NMLS # 1055557
Phone: 425-922-1055 | Fax: 855-549-8730 
This email address is being protected from spambots. You need JavaScript enabled to view it. 
This email address is being protected from spambots. You need JavaScript enabled to view it. 

        

            Member:            

 
Master Builders Association