We all want to be able to afford our mortgage. That is the very point of shopping for a lender.
We want to find a home loan that has favorable terms and reasonable interest rates.
There is this one other thing that makes us apprehend with it comes to buying a house — the down payment.
Building your credit and keeping it squeaky clean allows you to avail of the best home loan deals. A good credit score allows you to take a home loan with a competitive down payment. For conventional loans, a 20 percent down payment is asked if you have the minimum credit score required. Some people, however, are not blessed with stellar credit scores. In these instances, you may be asked to come up with an even larger down.
A 20 percent of the home sales price is just too big of a sum to put out of pocket. To many, a 20 percent down payment or bigger is already a financial burden.
If you are bombarded by this, there are still ways to solve your problem.
3 Percent Down for First-Time Buyers
If you are a first-time homebuyer, you can reduce your loan 3 percent with mortgage loans offered by these GSEs. What this means is that you are only required a loan-to-value (LTV) ratio of 97 percent. In most cases, an LTV ratio of 80 percent or lower is required from borrowers.
The only disadvantage with these kinds of mortgage loan programs is that it is specific to just first-time homebuyers. Those who are planning to refinance their mortgage or purchase a second home won’t qualify.
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A Borrower-friendly Loan with 3.5 Percent Down
One of the most lenient mortgage loan products out in the market is the FHA home loan. For a minimum credit score of 580, a borrower can qualify for a loan that only requires a 3.5 percent down payment.
While a larger down payment may be necessary to reduce the interest rate of the loan, a borrower will still be able to get a loan with a reasonable interest with just a 3.5 percent down payment.
a lender or a bank provides the financing for an FHA loan, lenders or banks may also have additional or different requirements aside from that of FHA. To get the best deals, shopping for a mortgage lender is highly recommended.
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Using Down Payment Assistance
This method may not actually reduce your down payment. However, a down payment assistance can offset the amount of money you need to come up with for a down. In the end, it lessens the amount of money you need to shell out of pocket.
Eligible borrowers may take advantage of many down payment assistance programs. Most of these target first-time homebuyers. Some of these programs aim to assist those who are struggling to build their savings intended for a down payment but have the ability to pay the loan.
There may be many different down payments assistance programs in your area which you can be eligible for. DPAsearch.com can help you get in touch with down payment assistance providers nearby so you can get the financial aid you need.
These are many wise options you can lower your mortgage down payment or offset the costs. You just need to know where to look. Shop around and look for lenders who offer low down payments without placing a ridiculously high interest. Also, do not forget to explore your down payment assistance options to help you get started with your homeownership plans.