Saving for your Happy Home
If you’ve been stressing about saving for a down payment, relax and read this. It may take some of the anxiety away.
The blissful truth: you don’t need to put 20% down
It’s true. There are so many different mortgage product options out there and they all come with their own down payment requirements. In fact, there are options that allow eligible buyers to put as little as 3% down. On a $250,000 home, that’s only $7,500.
It’s worthwhile to do research because your unique financial situation will help determine what type of mortgage you can get and how much money you need to put down. You may be pleasantly surprised at what you find, too.
Will you need Mortgage Insurance?
That depends. Mortgage down payments and mortgage insurance are closely aligned. While there are plenty of mortgage options that don’t require 20% down, borrowers who choose to go that route might be required to have Private Mortgage Insurance (PMI).
The good news is that, depending on the type of mortgage you get and your financial situation, PMI may not be required for the entire life of your mortgage loan. It may be canceled once you’ve built 20% equity in your home.
Now that you’re breathing a little easier, start doing your research on a down payment option that fits within your budget.