How to save for a down payment for you Arizona home

Buying a house can be a daunting task, especially if you’re not sure how much you need for a down payment. With so many loan options available, it can be hard to know where to start. However, don’t worry because I’m here to help you figure it out.

How Much Should I Save for My Down Payment

First things first, let’s address the 20 percent down myth. While it’s true that having a 20 percent down payment can benefit you in many ways, such as avoiding private mortgage insurance (PMI), it’s not always necessary. You can find loan options that allow you to put down as little as 3 percent or even zero percent. Here are some ways that you can finance your down payment if you’re concerned about covering it:

Conventional Loans

One option is a conventional loan, which allows you to put down as little as 3 percent.. This means that for a $300,000 home, you would only need to put down $9,000. Keep in mind that with this option, you may need to pay for PMI if you own less than 20 percent of the equity in your home.

FHA Loans

Another option is an FHA loan, which requires a down payment of just 3.5 percent. This means that for a $300,000 home, you would need to put down around $10,500. To qualify for an FHA loan, you need a credit score of at least 580.  In some cases with at least 10% down your score may be as low as 500.

VA and USDA Loans

If you’re a military member, you may be eligible for a VA loan, which requires no down payment. For USDA loans, you also don’t need a down payment if your home is in a USDA eligible area and you meet certain income requirements.

Remember, these are just brief summaries of each program. It’s best to reach out to a mortgage broker to see what option is best for you. As a mortgage broker, I am here to help you customize the program that works best for you and help you prepare for being a successful homeowner.

Don’t let the down payment scare you away from your dream of owning a home. With so many loan options available, you’re sure to find one that works for you. Just make sure to do your research, speak with a mortgage broker, and determine what’s feasible for your financial situation.