When you buy a new home, you may need to make a down payment. This is a percentage of the home’s purchase price that you pay upfront.
You probably have a lot of questions about down payments and how they work. In this two-part series, we are answering some of those questions. Be sure to check out Part 1 if you have not already. Then, read on in this post to discover the answers to a few more frequently asked questions about down payments.
Common Questions Regarding Down Payments
Q: Do I really need a 20% down payment?
A: You may or may not need to put 20% down to buy a home, depending on your financial scenario and the type of mortgage for which you are applying.
There are multiple mortgage products that allow for down payments lower than 20% with suitable qualifications.
Q: What is the lowest down payment for a home?
A: The lowest down payment for a home is actually zero down payment. But to qualify to buy a home with no down payment, you must be eligible for a mortgage program that features zero down. Examples include VA mortgages and USDA mortgages.
VA mortgage are available to qualifying veterans, active-duty service members and eligible surviving spouses. USDA loans are income-based, and may be an option to homebuyers who are purchasing homes in rural areas.
Q: What if I cannot afford a down payment?
A: This scenario is more common than you might realize. But you might still be able to purchase a home without waiting. If you cannot afford a down payment, the first option is to see if you qualify for a type of mortgage that features no down payment.
Another possibility is to apply for down payment assistance. We can help connect you to down payment assistance programs in your location. Down payment assistance in combination with a mortgage type that features a low down payment might also work.
Buy a Home with an Affordable Down Payment
If you read both parts in this series, you should be much better informed about down payments than you were before.
Should you have additional questions about down payments with respect to your individual borrower scenario, those are questions we can address during your consultation.
Whatever your situation, we will work hard to help you purchase a home affordably. Please call MMS Mortgage Services at (248) 788-0800. We can help you with home purchase or refinance in Michigan or 15 other states.