This is a question many people come to me with. It is a common misconception that in order to purchase a home, you must have a 20% down payment. In some cases, this is true, but not always. So what is the most common barrier to buying a house?
“Quicken Loans Vice President of Capital Markets Bill Banfield notes that the most common barrier to home ownership isn’t being able to afford the monthly mortgage payment—it’s being able to save the down payment.” A 20 percent down payment on a $300,000 home is $60,000. Unless you have a serious income, that is no small amount to save and put down on a property.
So how do I get around this monstrous down payment?
Thankfully, State and Federal governments want people to own homes, and as such, they offer programs that make it easier to acquire a home. The Federal Housing Administration requires a down payment of just 3.5 percent, however you must be able to meet other criteria, such as having a credit score of at least 580. The Nevada Housing Division (NHD) has a down payment assistance grant program called “Home is Possible.” In this program the down payment assistance grant can end up being as much as 5% of the loan amount to aid in down payment and closing costs. To qualify, there must be a combined household income of less than $95,500, the house must be priced below $400,000, the buyer must have a credit score of at least 640, the buyer must take a course in home ownership, and there is a one-time fee of $675. This is exciting news, especially for people who either cannot save the down payment amount, or would rather free up some money for themselves or their families. Please note that the “Home is Possible” program is a grant, and does not need to be repaid.
Are you or your spouse a member of the VA?
If you or your spouse has served in the military, you may qualify for a VA loan for as little as a $1 down payment. However, other criteria must be met, such as a required amount of active duty during wartime, being wounded in service, and others.
We have strong connections with various mortgage lenders and credit unions in the Las Vegas area, and are willing to explore all possible options with you in order to help secure a mortgage and down payment that works for you.
Check out these full articles here.