Your Ideal Loan & Down Payment
July 20, 2021
Are you interested in buying or custom building a new home, but you’re unsure if you can afford a down payment or qualify for a new home loan?
Alex Hawkins, one of our preferred lenders with C Solutions, provides some basic guidelines for different types of loans to help you buy your new Ideal home.
FHA: (Federal Housing Administration Loan)
The minimum down payment is 3.5% of the sales price ($10,500 for a $300,000 home). However, if buyers can put down 10%, they will not be required to pay MIP (mortgage insurance premium) for the life of the loan.
FHA – Native American 184 Loan:
The minimum down payment is 2.25% of the sales price ($6,750 for a $300,000 home).
The minimum down payment is 5% of sales price ($15,000 for a $300,000 home). There are some 3% options, but it is usually county/income driven. If buyers can put 20% down they can 'buy out' of the PMI (private mortgage insurance).
VA: (Veteran Affairs)
With a VA loan, there’s $0 down required unless the veteran does not have enough eligibility to support the loan amount. At that point a down payment may be required. This is rare occurrence. Various down payments are required for 2nd homes and investment properties and are considered on a case-by-case basis.
Note: A down payment is separate from closing costs and prepaids/escrows. The earnest money you put down when you wrote a contract with Ideal Homes & Neighborhoods will go toward your out-of-pocket costs.
BONUS: Ideal Homes & Neighborhoods now pays $4,000 towards your closing costs if you use one of our preferred lenders.