What’s standing between you and your dream of owning a home? If you’re like many would-be homebuyers, the down payment may be seemingly one of the biggest hurdles that is keeping you from looking for your dream home today. The good news is you may not have to wait to save a substantial down payment in order to buy a home. There are 3% down payment mortgage options which can help qualified buyers purchase a home to ease that upfront investment.
Mortgages which offer a 3% down option allow buyers to purchase a home without having to wait to save a substantial down payment. You may be eligible for a mortgage with a low down payment option if you meet the requirements for a Conventional loan (3% down payment requirement), or FHA loan (3.5% down payment requirement). Let’s compare the two.
With multiple programs to choose from, the requirements for a 3% down can help many buyers qualify for a low-down payment home loan. Your mortgage advisor can tell you if you meet the guidelines for these loans, which may include:
You have many options when it comes to the source of your 3% down payment. Some borrowers may have the funds already saved in a bank account, or retirement account such as a 401K or IRA. Both FHA and Conventional loans allow borrowers who don’t have the funds saved to use other alternatives, such as:
Borrowers can be gifted or given the entire amount of their down payment, and even additional funds to cover closing costs. If you are interested in receiving additional down payment assistance, ask your mortgage loan advisor what grants, loans, and other down payment assistance programs are available to you.
While the 3% down payment mortgage is often helpful for first-time buyers, that doesn’t necessarily exclude you from qualifying if you have owned a home in the past, either.
Borrowers who take advantage of the 3% down payment option are required to carry mortgage insurance (MI):
If the only thing standing between you and the dream of owning your own home is the amount of down payment you think you need to save, ask your mortgage advisor if a 3% down payment option is right for you. With gift funds and down payment assistance available, you may already have everything you need to get pre-approved for a home loan today.