Home down payment assistance program, tips to get $15,000

Home down payment assistance program, tips to get $15,000
July 02 18:35 2017

Home Down Payment

When it comes to getting a mortgage, there are many decisions you must make as you determine how much you can borrow.  One of the biggest is the amount of mortgage down payment you will need.   Many people wonder why they will deed a down payment and how much it will be.

Down payment assistance program

One reason a down payment is required is that the investors who back the bank or other lending institution have set certain guidelines that they must abide by.  The lenders have less risk if a down payment has been made because it is a show of good faith that you are capable of saving money, which is an indication that you will be able to make the payments over the length of the loan.

This is also connected to mortgage insurance requirements, because the insurer will not cover 100% of the loan.  They require a 10 to 20% down payment in order to provide for fluctuations in the market value of the home.

It is helpful to know that while a mortgage down payment is necessary when you are purchasing a house, there are different rules for a mortgage refinance.  When you are doing mortgage refinancing, you are borrowing against the equity in your house, so you will not need a down payment.  Instead, you just can’t borrow more than 80% of the actual value of the house.  If your mortgage is more than 80% of that value, you would need a down payment to bring it up to the 80% in order to get the mortgage refinance.

Down Payment Calculator

Different loan programs require different amounts for a down payment.  A conventional loan usually requires at least a 10% down payment, while an FHA loan only requires 3.5% down.  A VA loan doesn’t require a mortgage down payment, but you must be a veteran and meet the requirements.  A bad credit mortgage will usually require more money down than if you have good credit and get a traditional mortgage.  A jumbo mortgage usually requires 30 to 35% down.

The down payment is one of the options that can vary from one lender to another, so it really pays to shop around for a loan that you qualify for that has the lowest down payment available.  If you only have $10,000 in cash for your down payment, you will either have to go with a house that is only worth $100,000, or you will need to be eligible for an FHA or VA loan so that you can get a more expensive house with a lower down payment.

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