What is a Down Payment?

A down payment is the money you pay toward the cost of the house when you first buy it. You borrow the rest from the bank as a mortgage. The dayafter you close on your house, your down payment becomes the equity you have in your home.

A down payment of 3.5%–5% of the purchase price may be available for some government loans and some conventional loans. Additionally, a VA loan requires little to no down payment for eligible borrowers.

Down Payment Assistance (DPA)

If you are eligible for programs, our preferred lender will provide you with a mortgage loan and funding to use for your down payment. So don’t let a down payment hold you back from achieving your dreams of homeownership. Contact us to learn more about your down payment options including gifts to help you get the home you want.

Other Means of Securing Down Payment

Savings

·Buyers often save regularly for years by reducing expenses, taking a second job or getting a smaller apartment if they are renting.

 Gift

·If you accept a gift, you’ll need to get it clearly in writing that the person making the gift has no financial interest in or obligation toward the property. A bank will not accept it if your “gift” is really a loan.

 Proceeds from sale of existing home

·If you sell your home before you buy your next home, you may have proceeds from that sale that can be applied to the down payment on your new home.