So often, I sit down with a customer to talk numbers, sometimes a first time home buyer and sometimes someone buying for the second or third time, and they are so frustrated because they don’t feel like they can purchase a home due to not having a 20% down payment on-hand.
If you ask my grandfather, or even my dad, they are going to say you need 20% down, and while it has been the norm when it comes to home buying, it isn’t necessarily a reality anymore. In some cases, you don’t need any money down. VA and USDA both offer 100% financing products. If VA and USDA aren’t programs available to a borrower, we can look at doing an FHA loan with as little as 3.5% down and in some instances you can qualify for a conventional loan with as little as 3% down.
What are the pros and cons? I’m glad you asked!
Pros of Putting 20% Down:
- Lower monthly payment
- Lower interest rate
- Pay less interest over the life of the loan
- Lower closing cost
- More loan options
- No mortgage Insurance
Cons of Putting 20% Down:
- A large amount of money is required up front
- Your savings account will have less leftover for repairs and unexpected maintenance
- Could invest money elsewhere
Our team of mortgage experts are ready to sit down with you and go over what down payment amount is most comfortable for your situation and your long term goals. Contact our team today to start the conversation, learn more, and feel more confident in this phase of your financial journey. We are available for you on your schedule, and look forward to supporting you throughout your journey.
Jessica Roberts
VP, Mortgage Lending
NMLS# 1776355 / Bank NMLS# 491039
Learn more about mortgage options with Oconee State Bank here: https://www.oconeestatebank.com/mortgage