Minimum down payment
Updated: Feb 3
2020 Brought new opportunities for first time buyers who want to take advantage of the price record low interest rates but haven't got the 20% down. With FHA loans you can buy your first home with only 3.5% down. Meaning the banks are open to lending you up to 96.5% of the value of a home. To qualify you need at least a 580 credit score.
FHA LOANS- If your credit is between 500 and 579, you can still get an FHA loan if you put 10% down payment.
With FHA loans, your down payment can come from savings, a financial gift from a family member or a grant for down-payment assistance.
VA LOANS- According to Va.gov website "You have full entitlement if you meet either of the requirements listed below.
At least one of these must be true. You’ve: • Never used your home loan benefit, or • Paid a previous VA loan in full and sold the property (in this case, you’d have your full entitlement restored), or • Used your home loan benefit, but had a foreclosure or compromise claim (also called a short sale) and repaid us in full
Note: You may have heard the terms additional entitlement, bonus entitlement, or tier 2 entitlement. We use these terms when we communicate with lenders about VA-backed loans over $144,000. You won’t need to use these terms when applying for a loan".
How FHA Loans Work
It’s important to note that the Federal Housing Administration doesn’t actually lend you money for a mortgage. Instead, you get a loan from an FHA-approved lender, like a bank, and the FHA guarantees the loan.
An FHA loan requires that you pay two types of mortgage insurance premiums – an upfront mortgage premium insurance (UFMIP) and an Annual MIP (charged monthly). You pay this at the time of closing, or it can be rolled into the loan.
If your interested in getting help with applying for an FHA loan call our office today.