Many people mistakenly believe a 20% down payment is required for conventional home loans. However, the reality is that’s only true for homebuyers who want to avoid private mortgage insurance charges. Read on to learn how to find the lowest mortgage down payment possible.
Well … depending on the mortgage, lenders generally require homebuyers to contribute as little as 3% of the home’s purchase price. That being said, there are some mortgages that actually don’t require any down payment at all!
For example, here is a summary of the most common mortgage types and their minimum down payment requirements:
Summary of Lowest Mortgage Down Payments
Conventional loans
Typically, the lowest mortgage down payment for conventional loans from Freddy Mac and Fannie Mae is 5% — and 3% for qualifying first-time homebuyers.
FHA loans
The minimum down payment is 3.5%.
VA loans
These mortgages require no money down for qualifying military members and some surviving spouses.
Section 502 loans
These mortgages are also known as Rural Home Loans or USDA Loans and are offered by the US Department of Agriculture. Like VA loans, they require no down payment for eligible borrowers.
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Readers: This is article 13 of 25 from my no-nonsense “Mortgage Basics” quick-reference series.
Photo Credit: GotCredit