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How Much Down Payment Do I Need for my Mortgage Loan?

How Much Down Payment Do I Need for my Mortgage Loan?

In today’s mortgage market there are a lot of products, which means more choice for you.  Depending on your background and the location of the property, you may be able to put down 0%, and you can always put down 100% if you have the cash. 

The answer really is 0%-100%.  But, as I’m sure you’re aware, there are many factors at play when determining how much you, individually, need to put down.


USDA Loan = minimum required down payment = 0%

This program allows individuals in many rural areas to purchase a property without putting anything down.  There are some catches though: first, the property must be located in an eligible area, and second, there are income limitations for the borrowers.


VA Loan = minimum required down payment = 0%

This program is helpful for borrowers without a down payment because the VA guarantees part of this loan.  As the name implies, you must be a veteran in order to be eligible though.


FHA Loan = minimum required down payment = 3.5%

If your income is too high for the USDA mortgage loan and you were not in the military, you still have good options.  One is the FHA loan, which only requires 3.5% down payment.  There are less restrictions on the property location than the USDA mortgage loan as well.  The FHA insures this loan, which allows the bank to lend with smaller risk, allowing the lender to approve more borrowers.


Conventional Loan = minimum required down payment = 3%

The least expensive mortgage is the conventional mortgage.  This type of loan follows the Fannie Mae standards and requires a minimum of 3% down payment.  Generally, applicants need to have higher credit scores than the above mortgage loan options in order to qualify.


In addition to the down payments mentioned above, another important aspect of a mortgage loan is the closing cost.  Purchasing a property is a significant feat.  It generally requires the cooperation of two real estate agents, two real estate brokers, a lender, the title agent, and an attorney.  In order for the purchase contract to be executed and the title to formally transfer to the Buyer, there is a lot of work and research that happens behind the scenes, which creates cost in order to close the loan.  When looking at the above down payments, don’t forget to factor in $3k-$8k for closing cost.  These range significantly based on the type of mortgage loan you decide is best for you.

There is much more information about these loans that I would like to share.  Please feel free to reach out to me with any questions - or 740-502-1390.