Exploring Different Down payment Options
Congratulations! Buying a new home to call your own is a significant milestone in your life. Buying a home can be one of the most exciting — and stressful — moments of your life. Purchasing a home is a big decision, one that has an impact on your credit and finances like no other purchase could. Did you know the vast majority of homes are purchased through a mortgage? However, most traditional mortgages require a certain percentage down — many potential homeowners might not have that certain amount of money to put down.
What if you meet all other requirements but just don’t have the cash for that huge down payment? Fortunately, there are numerous down payment options out there designed to get you into your dream home with little to money down. In this article nationwide mortgage will discuss a few options that will help make your dream come true.
Buying your first home: the down payment
First-time home buyers face more hurdles than any repeat buyers. A first-time home buyer may have less saving to purchase their dream home. He or she might have a collection of student loans, credit card and other large debts hindering the process to make a down payment.
Perhaps the potential buyers are just starting a career, getting engaged or just starting over. Did you know, first-timers have no buying experience or how the process works for putting down payment on a home?
What is Down Payment?
A down payment is the amount of money you spend upfront to purchase a home and is typically combined with a home loan to fulfill the total purchase price of a home. In addition, your down payment amount, your credit score, credit history, total debt and annual income will influence how much of a loan you can qualify for.
How much is down payment required to buy a home?
As a first-time and potential home buyer, you have access to a wide range of mortgage loans and programs that can be customized to meet your needs. Did you know your loan amount is one of your choices?
The down payment can be as large as you wish, or as small — so long as you make the minimum investment required by us. The three most common low and no — down payment options used by first-time home buyers are the FHA loan, the Veterans Affairs loans, and Jumbo loans.
The Federal Housing Administration Loan (FHA)
The FHA is a federal government agency within the U.S. Department of Housing and Urban Development. FHA plays a significant role in helping low- to moderate-income families qualify for mortgages. FHA assists first-time buyers and others who would not qualify for a conventional loan, by providing mortgage insurance to private lenders.
Interest rates for an FHA loan are usually the going market rate, while the down payment requirements for an FHA loan are lower than conventional loans. The required down payment can be as low as 3.5 percent and the closing costs can be included in the mortgage amount. The FHA isn’t a lender and doesn’t directly make home loans. Instead, the FHA insures home loans against the borrower’s default to encourage lenders to offer the loans to home buyers and homeowners at more affordable interest rates.
A jumbo mortgage is a home loan with an amount that exceeds conforming loan limits imposed by Fannie Mae and Freddie Mac, the two government-sponsored enterprises that buy a mortgage in Fort Lauderdale from lenders. The limit is $424,100 in most parts of the United States but is $625,500 in the highest-cost areas and in-between in others. The cost of a jumbo loan is higher than a standard loan, so expect a higher interest rate for a jumbo loan.
Qualifications for Jumbo Loans
If you are considering purchasing a home, you will need to know what is required to be eligible for jumbo loans. If the price of the home exceeds the conforming limit of $424,100 which is set by Fannie Mae or Freddie Mac, then a jumbo loan is needed. Once you have reviewed the requirements, you can begin getting everything together.
To qualify for a jumbo loan, you will need to meet the following criteria:
- Minimum credit score of 680. A lower credit score may be accepted if a larger down payment is put down.
- Minimum down payment of 20% (sometimes can be lower)
- Debt to income ratio cannot exceed 43%. (Some lenders will deviate from this percentage.)
If you meet these requirements, then you need to choose a lender. They will tell you if there are any additional requirements. Our lenders atNHL lending will help you from the beginning until the end. We will stick by your side and answer any questions that you may have.
Veteran Affairs Loans
VA Loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans can qualify for a VA Loan, which usually offers a competitive fixed interest rate, no down payment, and limited closing costs. While the VA does not issue the loans, it does issue a certificate of eligibility required to apply for a VA loan.
The VA Home Loan Advantage
The Veterans Home Loan program is one of the most powerful loan programs available on the market for service members, veterans, and military families. These flexible home loans are government backed and offer significant advantages to allow homeowners to those that may struggle for financing. The two most important advantages of a VA home loan is that they do not require a down payment nor do you have to obtain private mortgage insurance.
With a VA home loan, you will have competitive rates and terms as well. Our lenders are ready to help you get into the home of your dreams with little to no stress.
No Down Payment Needed
As a service member, you may have noticed that saving money and building your credit is difficult, especially since you are always on the move. With this type of home loan, you are able to finance the value of the home without having to come up with any money.
Why choose Nationwide Home Loans?
We are a Florida based mortgage lending firm recognized for our outstanding customer service and the strong reputation for getting even the most difficult of loans closed. We offer a wide variety of mortgage rates in Fort Lauderdale, FL, competitive pricing and sound advice about what is best for each client’s individual situation.
As a full-service mortgage lender, Nationwide Home Loans has made the dream of homeownership come true for thousands of home buyers. We are able to offer a wide range of products, including; Conventional, FHA, VA, and various terms on fixed or adjustable rate loans. Whether you are buying, refinancing, or building your home, Nationwide Home Loans can provide you with the best mortgage rates in Fort Lauderdale to meet your specific needs.