Mortgage News

The Fine Details on Down Payment

August 6th, 2014

I read an interesting study that half of Millennial homebuyers plan to ask their parents to help with the down payment. Whether you are a 20-something or a bit older, many people might not know the various down payment requirements.

Here's the breakdown:

VA Loan (Veterans Administration) -- available to military personnel and veterans.
Only used for a primary residence. There's a 0% down payment as long as the value of the house is below a certain threshold (based on the city where it's located). For most of Hampton Roads, the limit is $458,850. For more on VA Loan limits, 
read this.
FHA Loan (Federal Housing Administration) -- available to the general public.
Only used for a primary residence and requires a 3.5% down payment.

Conventional Loan -- available to the general public.
Can be used for primary residence, second home or investment property. 

Some lenders will accept as little as a 3% down payment (with monthly mortgage insurance) depending on the occupancy, credit scores, etc. 
To avoid PMI (what's PMI?), you need to put down 20%, but make sure you speak to your lender about different loan requirements. 

 

Shikma Rubin

Mortgage Banker, NMLS# 1114873

757-490-4726

srubin@tidewaterhomefunding.com

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