How much do I need for a down payment?

The national average for down payments is 11%. But that figure includes first time and repeat buyers. Let’s take a closer look:

While the broad down payment average is 11%, first time homebuyers usually only put down 3-5%. That’s because some first-time home buyer programs don’t require big down payments. A longtime favorite, the FHA loan, requires 3.5% down. Some programs also allow down payment contributions from family members in the form of a gift.

Some programs may require even less. VA loans and USDA loans can be made with zero down. However, these programs are more restrictive. You must be a former or current military service members to qualify for a VA loan. USDA loans are only available to low to-middle income buyers in USDA-eligible rural areas.

For many years, conventional loans required a 20% down payment. These types of loans were typically taken out by repeat buyers who could use equity from their existing home as a source of down payment funds. However, some newer conventional loan programs are available with 3% down if the borrower carries private mortgage insurance (PMI).

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If you are ready to explore what loan is right for you, please reach out. I will refer you to a local Pittsburgh lender who will help you find what mortgage loan best fits your needs.

Source: rubyhome.com