Translate:

EN

Can I Borrow Money For a Down Payment? Yes, But You May Not Need to

Can I Borrow Money For a Down Payment? Yes, But You May Not Need to


Can I Borrow Money For a Down Payment? Yes, But You May Not Need to

When you’re wanting to purchase a new home, you’ll undoubtedly be concerned about how much to pay down on the property. After all, a down payment affects your interest rate and how much home you can afford.

If you haven’t been able to squirrel away a hefty savings, you may be considering trying to borrow money for the down payment. While this is an option, you may be better off shopping around for a mortgage loan that requires either a smaller down payment or 100% financing options.

Knowing all your choices is the first step toward making a good decision. Here are some home loan programs that may benefit you, even if you haven’t saved a big down payment.

FHA Loans

Federal Housing Administration (FHA) loans require much less than the 20% down most conventional loans do. Consumers who qualify for FHA loans typically only have to put 3.5% down. This smaller down payment can help hopeful homebuyers purchase a house faster than if they had to save for years.

VA Loans

Veteran’s Affairs (VA) loans are open to eligible active duty and veteran military men and women and, in some cases, their spouses. VA loans offer borrowers low down payments or 100% financing options for their new property.

USDA Loans

U.S. Department of Agriculture (USDA) loans are another viable option for borrowers who don’t have a large down payment saved for purchasing their home. If the homebuyer is purchasing a property in a rural area, a USDA home loan may include 100% financing options for eligible applicants.

What a Lower Down Payment Means

Paying a smaller amount down, or taking advantage of the 100% financing option, affects other aspects of your mortgage loan. Weigh these into the mix when you’re deciding if you want to go with a program that offers a lower down payment.

  • Higher monthly payment. Making a big down payment means you finance a smaller amount with your mortgage loan. The more you pay down, the lower your monthly payment will be. If you’re leaning toward a smaller down payment, make sure your budget can handle the bigger monthly payment.
  • PMI insurance. Some, but not all, loan programs that let you make a smaller payment down require private mortgage insurance (PMI). This ensures that lenders will receive their money if you default on your loan. PMI is expensive and typically increases your monthly mortgage payment. The good news is, when you have built up equity in the home, you can refinance it and get PMI removed.

The homebuying process is packed with choices, and your down payment amount is a big one. Deciding how big of a down payment to make on your property takes careful consideration. It all boils down to how much you have saved, how long you’re willing to wait to build up a down payment, and the types of loans you qualify for. Talk to an experienced loan officer to understand all of your options.

Share

Mortgage Investors Group, based in Tennessee, offers residential financing in a number of states in the southeast, See MIG Service Areas. Terms and conditions to apply to home financing. We want to share with you the loan terms vary based on several characteristics and your financial profile. These include but are not limited to loan program, loan purpose, occupancy, credit history, credit score, assets, and other criteria per loan type. The repayment terms and interest rate may vary from time to time. The terms represented here are based on certain assumptions outlined below and/or noted on the loan outline page. Additional details concerning privacy, program disclosures, licensing specifics may be found at migonline.com Legal Information.

MIG Loan Officers will help gather the information needed for an individual assessment to provide home financing which matches the loan characteristics with your home financing needs based on your financial profile, when you are ready to begin a full loan application. For estimates and general information before that step, the basis for which the mortgage financing information are as follows:

  • Rates are subject to change at any time.
  • Rate locks are available at current terms for 30 to 180 days based on program type, credit profile, property location, etc. which will affect the available rate and term.
  • Rate locks are available at current terms for 30 to 180 days based on program type, credit profile, property location, etc. which will affect the available rate and term.
  • Payments will vary based on program selection, current rates, property location, etc.
  • Not all programs are available in all states.
  • Some loan programs may not be available to first time home buyers.
  • Terms and conditions apply, which may include restrictions or limits per loan program.
  • Information is generally based on primary residence occupancy with no cash out when refinancing.
  • Unless otherwise stated, terms shown are estimates based in part on credit score of 700 or higher; owner occupancy, escrow account is established for taxes and insurance(s); debt-to-income ratio no higher than 43.0%; PMI applies to conventional loan programs over 80.0% LTV; VA,FHA & RD require insuring fees included in loan and/or payment; fixed rate, 30 year term.

An MIG Loan Officer is available to help with your financial details to determine which characteristics apply to your situation for a personalized look into which loan program best fits your home financing needs. Please use the Find a Loan Officer link or reach out to Mortgage Investors Group at 800-489-8910. Equal Housing Lender 1.2020