Saving for a Down Payment and How Much do I Need?

When you are saving up to buy a new home, one of the best ways to get great financing is to offer a decent down payment amount. However, many different factors go into how much people should save for a home down payment. Lucey Mortgage Corporate in Mount Pleasant, SC has helped many people secure a great home mortgage. Today we are here to discuss how much down payment to save when you a buying a home, however, each situation is different. We welcome you to contact our offices to discuss your options.

Saving for Down Payment: First Time Home Buyers

Many customers seeking to understand how much to save up for a home down payment are purchasing a house for the first time. You should consult professionals and do thorough research. In order to decide how much to save, it is important to consider what type of mortgage you wish to secure and how you will qualify for the loan. Many advise to save 20% for a down payment on a home. However, what if this is not possible and you a buying in an expensive market? Many first time homebuyers can apply for programs with low down payment requirements.

One of the main programs people apply for is the FHA Loan, which is a government-backed mortgage insured by the Federal Housing Administration (FHA). Many people only need around 3.5% of the down payment to qualify. However, you need to consider if the extra fees and inspection requirements in the FHA Loan program are worth it. Another great program with low barriers is the USDA Loan, which offers zero down-payment options.

Saving for Down Payment: Assistance Programs

Certain areas offer programs that will assist a homebuyer with the down payment costs. These programs typically come with requirements, which may include:

  • Requirements to attend credit and home ownership education classes.
  • Requirements for minimum credit scores.
  • Limits on how many homes you have owned, or requirements to be a first-time homebuyer.
  • Restrictions on income, home price, location, and reselling options.
  • Requirements to repay the down payment assistance offered.

When you research and decide how much you want to save for a down payment, you must then plan the fastest way to accomplish your savings target. Many people open a special savings account and transfer a monthly sum. In addition, they cut back on vacations and non-essential expenses. Some will need debt and credit counseling to stabilize their finances before they can save. Whatever your situation, we welcome you to contact Lucey Mortgage Corporation in Mount Pleasant, SC for more information on the various down payment options you have for purchasing a home.