Florida Real Estate Blog

For those people who are tired of renting a home and just want to buy, but don't have a down payment, the options often seem limited. Saving that big 20 percent or more seems impossible initially. There's little doubt that having a down payment is a good thing and it can help you to achieve a lower interest rate. However, it is not always necessary. Consider these helpful tips about down payments.

A good place to start is with the conventional loan. Each lender sets his or her terms for these loans, giving you some leeway. That is, some lenders require no more than 10 percent. Nevertheless, you may be able to piggyback two loans, one for the 10 percent and another for the remaining balance on the home. Before you make this decision, be sure to talk to a mortgage loan specialist to ensure it is the best option for your individual situations. It is not for everyone. It may be possible to find a zero down payment loan, but you will pay more in a higher interest rate and you will need to have a high credit score to secure these.

FHA Loans and Down Payments

If you qualify for an FHA loan, which means you are a first time homebuyer or you haven't had ownership in a home in the last three years, some new options become available. These loans have lower interest rates, and they tend to have lower down payment requirements, sometimes no more than three percent. Again, you may be able to borrow those funds from a secondary source. VA loans, which are often available for individuals who have been in the military or currently are. These loans require no down payments because they are backed by the VA.

You can get creative with the lending options in many instances. Ultimately, you need to focus on finding the most affordable loan available to you. You also need to consider if you can put down money at all. Realize that while the down payment is a good portion of funds, you will also need available funds for closing and for home renovations when you move in. Carefully consider the advantages, and limitations, of not having a down payment before you decide to go with any of these particular routes. It can make a big difference in the long term.

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