Mortgage Basics

Do I Need a 20% Down Payment to Buy a Home?

Written By  Scott Buehler

A common misconception and rumor that floats around is that you need a 20% down payment in order to buy a home. It’s completely untrue. 20% down simply allows you to avoid private mortgage insurance on a standard conventional loan.

Conventional loans can be done with as little as 3% down as a First Time Homebuyer. A first time homebuyer is defined as at least one borrower hasn’t owned a home within the past three years.

Even if you don’t qualify as a first time homebuyer for a 3% down payment, you could still buy a single residence, primary mortgage with just 5% down.

Another great option if you don’t want to go with a 5% down Conventional loan is the FHA government secured loan. This loan option allows you to get a mortgage with as little as a 3.5% down payment plus closing costs.

What about closing costs?

Your closing costs, unlike a down payment, can come from other resources. It’s possible to write your real estate contract with seller concessions to help with closing costs. You can also borrow closing costs from an immediate relative with a letter of explanation that says there is no expectation of payback. Some loans also allow Loan Officers to finance some or all of the closing costs into your mortgage.

There’s plenty ways that I can assist you as your loan officer. What happens is after I get your “financial story,” if you need help with closing costs, I will have a discussion with your real estate agent to find solutions to leap that hurdle.

What if I have no money for a down payment?

There’s still homebuyer down payment assistance programs available to you. In Utah, for instance, there’s the VA 100% financing loan, the USDA Rural 100% financing loan and multiple Utah Housing down payment assistance loans available.

Besides down payment assistance programs, some other lending programs allow you to receive your down payment as a gift from immediate family members and other sources. Speak to me about these options.

To learn more about 100% financing options in Utah, please go to my 100% Utah Financing Options page for more information.

Want to discuss your options with a licensed, reputable and trusted Loan Officer? Please text 435-590-1019 to arrange a free, no-obligation mortgage consultation.

Scott Buehler

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About Scott Buehler - Author

Your Senior Mortgage Consultant and home loan professional for Utah and California. I've spent years perfecting the home loan process to provide you with the best mortgage experience. Whether you are buying, selling, need to consolidate or lower your rate, call Scott Buehler today at 435-590-1019. Try my Ultimate Guide to Home Purchasing or get started with my pre-qualification questionnaire.

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