A lot of people are really unsure about how much down payment is REALLY needed to purchase a house. To be honest, that number can totally depend on what kind of loan you want to get. If you are interested in buying a home, it might be a good idea to meet with a Mortgage Broker to see what the best option for you would be! Here are some popular choices:
FHA Loans: This is a very popular options for buyers looking to get their foot in the door! These loans offer a down payment as low as 3.5% of the mortgage amount. However, there is a cap set on the value of the home set by the Parish or County. Lafayette Parish's value limit for a single family home is $271,050.
VA Loans: Military Veterans are eligible for this loan and it requires zero down payment for 100% of the loan value as long as the loan is under $417,000.
Conforming Loans: These loans can have a fixed or variable interest rate, although most choose a fixed because it's a more predictable loan. These are given out by private vendors, like Bank of America. These lenders set the guidelines for these loans. Bank of America, for example, requires 5% down on a loan $417,000 or less and 10% down on loans up to $729,750. However, there are exceptions to every rule and there are some cases where banks will give you a lower interest rate or provide a down payment assistance program. This is why it's important to meet with a mortgage broker to get all of your options.
Non Conforming Loans: These are typically called "jumbo loans" and require 20% down. This is always a good option because you won't have to pay PMI (Private Mortgage Insurance).
It's important when making a decision not to forget about all the hidden costs. You do not want to be house poor, so it's crucial to not sink your life's saving into a down payment. Hidden costs might include PMI (you have to pay it if you don't put 20% down), homeowners insurance, neighborhood association fees, property taxes, and home repairs. You'll probably want some extra money to decorate too!!!!!
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