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Low Down Payment Options
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Are you looking for low
Down Payment Options
?

There are options that can make you a home owner with a low down payment. Deciding on how much money to use as a down payment can be confusing. Valor Home Mortgage LLC is here to help. The route for each buyer or investor depends on their situation and personal preferences.

Are you looking for low Down Payment Options?

There are options that can make you a home owner with a low down payment. Deciding on how much money to use as a down payment can be confusing. Valor Home Mortgage LLC is here to help. The route for each buyer or investor depends on their situation and personal preferences.

Low Down Payment Options

VA Loan

Military veterans who qualify for a VA loan can purchase a home with no money down. VA loans can provide up to 100% financing for qualified military personnel and veterans.

There are also non-conforming mortgage loan programs available that allow for 80/20 set-ups, which allow borrowers to obtain a second mortgage to cover the 20% down payment.

Have less than perfect income and credit? We may have a program that fits your needs!

FHA Loan

You can purchase a single-family home or condominium with as little as 3.5% down payment using an FHA loan, but there is a price for lower down payments on conforming loans: mortgage insurance (often called PMI, private mortgage insurance).

Mortgage insurance is required when the conforming loan amount is MORE than 80% of the purchase price (practical translation: down payment is less than 20%). Also, the lower the down payment, the higher the premium ratio charged.

USDA Loan

Is your dream home surrounded by pasture and farmland? Buyers in rural and suburban markets may be able to use a USDA loan, which requires no money down.

Household income limitations do apply and buyers should expect to pay PMI if their down payment is less than 20%.

Conventional Loan

One of the biggest obstacles for aspiring homeowners is coming up with a down payment. When you consider that the traditional wisdom is that you need 20% down in order to afford a down payment, the concern makes sense. The fact is that there are many loan program options where you can get a conventional loan with as little as 3% down.

Low Down Payment Options

VA Loan

Military veterans who qualify for a VA loan can purchase a home with no money down. VA loans can provide up to 100% financing for qualified military personnel and veterans.

There are also non-conforming mortgage loan programs available that allow for 80/20 set-ups, which allow borrowers to obtain a second mortgage to cover the 20% down payment.

Have less than perfect income and credit? We may have a program that fits your needs!

FHA Loan

You can purchase a single-family home or condominium with as little as 3.5% down payment using an FHA loan, but there is a price for lower down payments on conforming loans: mortgage insurance (often called PMI, private mortgage insurance).

Mortgage insurance is required when the conforming loan amount is MORE than 80% of the purchase price (practical translation: down payment is less than 20%). Also, the lower the down payment, the higher the premium ratio charged.

USDA Loan

Is your dream home surrounded by pasture and farmland? Buyers in rural and suburban markets may be able to use a USDA loan, which requires no money down.

Household income limitations do apply and buyers should expect to pay PMI if their down payment is less than 20%.

Conventional Loan

One of the biggest obstacles for aspiring homeowners is coming up with a down payment. When you consider that the traditional wisdom is that you need 20% down in order to afford a down payment, the concern makes sense. The fact is that there are many loan program options where you can get a conventional loan with as little as 3% down.

How Much to Use for a Down Payment

There are costs and benefits to any option, including those with low down payments. You should carefully consider your options and discuss your plan with a professional. Carefully consider the amount of money that you want to put down. Your lender will qualify you for a certain level based on your income; however, that amount may be different from the level that you feel comfortable paying each month. You must decide what you can afford.

Talk to one of our loan specialists today to come up with a customized solution that best fits your needs and budget!

How Much to Use for a Down Payment

There are costs and benefits to any option, including those with low down payments. You should carefully consider your options and discuss your plan with a professional. Carefully consider the amount of money that you want to put down. Your lender will qualify you for a certain level based on your income; however, that amount may be different from the level that you feel comfortable paying each month. You must decide what you can afford.

Talk to one of our loan specialists today to come up with a customized solution that best fits your needs and budget!

Benefits of Lower Down Payments

Though the disadvantages of low down payments seem serious, there are also advantages. Take time to weigh the two and assess which is the best for you.

The chief benefits of lower down payment include the following:

  • Less money out of pocket at the time of purchase.
  • Higher rate of return. Your property’s appreciation will be the same whether you put 3%, 5%, or 20% down. In fact, your rate of return actually decreases as you make a larger down payment, as discussed below.
  • Opportunity cost. In some cases, the smart investor can make more money from available cash by placing it in other investments.

During the first few years of the mortgage loan, the bulk of your monthly payments go towards paying interest – which is usually tax-deductible. So you get quite a bit of your monthly payments back at the end of the year in the form of tax deductions.

Benefits of Lower Down Payments

Though the disadvantages of low down payments seem serious, there are also advantages. Take time to weigh the two and assess which is the best for you.

The chief benefits of lower down payment include the following:

  • Less money out of pocket at the time of purchase.
  • Higher rate of return. Your property’s appreciation will be the same whether you put 3%, 5%, or 20% down. In fact, your rate of return actually decreases as you make a larger down payment, as discussed below.
  • Opportunity cost. In some cases, the smart investor can make more money from available cash by placing it in other investments.

During the first few years of the mortgage loan, the bulk of your monthly payments go towards paying interest – which is usually tax-deductible. So you get quite a bit of your monthly payments back at the end of the year in the form of tax deductions.

Get Your FREE Low Down Payment Mortgage Quote Now!

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