What type of down payment assistance is available?
If you’ve done all the right things and still cannot manage to come up with the necessary funds
for your down payment or closing cost, the Federal government has several programs in place to
assist you with those fees.
Most of these programs provide assistance to first time homebuyers and or individuals with
low to moderate income. Everyone who is assisted through these programs have to meet state
and/or federal guidelines.
If you have a steady job and great credit, you may be able to put down as little as 3%.
Rates vary widely and a low-down payment mortgage will have an interest rate at least half
a point higher than a conventional loan. With our 97% mortgage example of $178,577, that
extra half-point of interest adds an additional $56 a month to the payment. The more money
you can find for a down payment, the more options you have. If you put 5% down, you may
qualify with a smaller salary than those who put 3% down. By placing more down, you are showing
that you will not default on your investment.
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