Pat Starnes Snippets: FAQ - How Much Down Payment Do I Need To Buy a House?

FAQ - How Much Down Payment Do I Need To Buy a House?

One question I hear frequently from home buyers is how much down payment will they need to buy a home.

Down payments typically start at 3%, 3.5%, 5% and go to 20%, but in some instances, loans are available where NO down payment is required.

 

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THREE OPTIONS FOR NO DOWN PAYMENT (Zip, Zero, Nada):

  1. VA Loans ~ If the borrower is eligible for VA financing, you can borrow 100% of the sales price. 
  2. USDA Rural Housing loans ~ offers 100% financing to qualified buyers based on credit approval, income limits, and qualifying location.
  3. Mississippi Home Corporation ~ has Bond money available which is a Cash Advance feature to assist borrowers with down payment and closing costs. These loans are for either first time home buyers or people who have not owned a principal residence in the past three years. Income guidelines must be met. 

 

FHA:

This stands for Federal Housing Administration. The FHA program has been around since the 1930s. Backed by the Federal Government, these loans are designed to make home buying affordable for most Americans. The maximum loan amount in Rankin, Hinds, and Madison counties is $281,750 before MIP (Mortgage Insurance Premium). You must have a minimum credit score of 600 to qualify, and a 3.5% down payment.

 

CONVENTIONAL:

Conventional loans have a minimum down payment requirement between 3-5%, with a minimum credit score of 620. Mortgage insurance is required until your equity in the property is roughly 22%.

 


 

Other programs are available, but these are the most popular choices. Specialty loans are available for doctors, teachers, self-employed individuals with verifiable income, but I won't go into these here.

As you can see above, there are a few types of loans that require no down payment. Others require between 3-5%. If you have specific questions you'd like to ask on a personal basis about home buying or financing in the Jackson metro area, feel free to call me. I'm here to help.

Magnolia Photo by Pat Starnes

Image courtesy of sscreations at FreeDigitalPhotos.net

 

Written and Published by Pat Starnes REALTOR

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Pat specializes in Residential and New Home Sales 

Primary Service Area:

Brandon, Pearl, Ridgeland, Flowood, Madison and the Ross Barnett Reservoir area

 Pat Starnes, Broker Associate

Front Gate Real Estate, 6700 Old Canton Rd., Suite C

Ridgeland, MS 39157

601-991-2900 - Office

601-278-4513 - Cell

 

Recent Blog Posts by Pat Starnes:

 

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Homes for Sale in Scottish Hills ~ Brandon MS 39047

Homes for Sale in Hidden Hills Subdivision, Brandon, MS 39047

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Gardens of Manship Neighborhood Information - Brandon, MS 39047

 

Are you looking to buy or sell a home in the Brandon MS market? Call me!

Comment balloon 4 commentsPat Starnes-Front Gate Realty • June 25 2017 03:33AM

Comments

Good information for homebuyers hoping to purchase with little down, Pat.

Posted by Myrl Jeffcoat, Greater Sacramento Real Estate Agent (GreatWest Realty) over 1 year ago

Great information here  Pat Starnes . We get asked that question often and that is a solid indication that the prospects have not spoken directly with a lender. Something we correct promptly.

Posted by Sandy Padula and Norm Padula, JD, GRI, Presence, Persistence & Perseverance (Realty National & Geneva Financial, Llc.) over 1 year ago

It totally depends on the type of loan as you so clearly stated. You have made this easy for consumers to understand.

Posted by Debbie Reynolds, Your Dedicated Clarksville TN Real Estate Agent (Platinum Properties) over 1 year ago

Very easy to understand loan programs and their down payments.  

Posted by Chris Ann Cleland, Associate Broker, Bristow, VA (Long and Foster REALTORS®, Gainesville, VA) over 1 year ago

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