Myth – Your Down Payment Must be 20%
While a 20% down payment will allow you to avoid paying private mortgage insurance (PMI), there are many programs that allow you to buy a home with less than a 20% down payment. If you don’t have the 20% and are concerned about paying the additional PMI, please note that a conventional loan (as opposed to a VA or FHA loan) will allow you to have the PMI payment removed at a future point when you have at least 20% equity in the home. The FHA loan will require you to refinance your home (and pay additional fees) to remove PMI at that future date.
So what kinds of options do you have for a loan program with less than 20% down?
- Active duty military and veterans qualify for the VA loan which allows you to buy a home with NO DOWN PAYMENT.
- The Federal USDA Rural Development Program offers down payment assistance for buying in rural areas (this includes parts of Reno and Sparks, Carson City, all of Douglas and Lyon county areas at the time of this writing) so you may be able to buy with NO DOWN PAYMENT.
- The State of Nevada Home Is Possible programs offer down payment assistance for military, first time home buyers, and teachers – this program can allow you to buy a home with NO DOWN PAYMENT.
- The FHA and FHA 203K Rehabilitation loan program allows you to buy with a 3.5% down payment.
All of these programs have pros and cons that you would want to consider. If you want to explore these options further, complete the form below and we will arrange a free consultation with our local, program certified lender to help you better understand and evaluate all programs you may qualify for.
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