What is the minimum required down payment anyway? If you have your financing plan structured with your lender before November 16th 2013, on a conventional loan the minimum is 3% of the purchase price. That means a $10,500 minimum down-payment for a $350,000 home. If you don’t have your financing structured with a diligent professional lender before that date, your minimum down payment for a conventional loan will be 5% ($17,500 for that same purchase price).
How do I get my financing plan structured to avoid the minimum going up on me? In order to ‘lock in’ the possibility of a 3% down-payment you will need to work closely with a lender who will secure something called “DU findings” from Fannie Mae on your behalf. He/she will do this by gathering all of the pertinent information and documentation, pulling your credit report, and putting your exact scenario into Fannie Mae’s system. If you have an acceptable scenario for a 3% down-payment before November 16th and make your way into Fannie Mae’s system, you will be able to continue shopping for houses past that date and be ‘locked in’ to the 3% down-payment structure.
Are there any other options for keeping my minimum down payment as low as possible? The two alternative and most readily available options in keeping your down payment as low as possible will be securing FHA financing, or utilizing a down payment assistance program such as Home Advantage. Both of which have advantages and disadvantages when compared to the standard conventional financing structure. To learn more about these programs view: FHA vs. Conventional and Home Advantage DPA.
Don’t make one of the biggest financial decisions of your life without getting educated! If you would like to gather more information about down payment options or the home buying process in general, please go to our Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer workshops.