You Don’t Need as Much Money as You May Think to Buy A Home

Are you dreaming of owning a home but think you need to save up for years to make it happen? Think again! You don’t need as much money as you think to buy a home.

Here are three key things that can help you achieve your dream of home ownership sooner than you think:

Low Down-Payment Options

With options like FHA Loans offering as little as 3.5% down, Conventional Loans as low as 3% down, and VA Loans and USDA Loans as low as $0 down, you don’t need to have a massive amount saved to purchase a home. For these low down payment options to apply, the total loan amount would have to be under your county’s loan limit. For example, in Orange County and Los Angeles, you can purchase a home with as little as 3% down with a conventional loan, up to $1.12M, meaning you’d only need a down payment of $32,000! That same home with an FHA loan would only require a 3.5% down payment, or $39,200. In San Bernardino and Riverside counties. you can purchase up to $747,986 with only 3% down with conventional loan, meaning a down payment of $21,786. The FHA loan limit for San Bernardino and Riverside counties is a little lower, but you can still purchase up to $666,540 with an FHA loan and a down payment of 3.5%, or $22,540. If you’d like to learn more about the difference between conventional and FHA loans, CLICK HERE. With a VA loan, there are no loan limits, as long as you qualify for the payment. 

Seller Credit and Rate Buydown Programs

You can utilize seller credits to cover closing costs or participate in rate buydown programs, which can result in less money out of your pocket at closing. Sellers in this current market are more willing to negotiate seller credit into the offer to help you as a buyer close on their home. These credits can be utilized for a rate buydown program, to lower your payment for up to 3 years, or to cover closing costs. For example, if you qualify for a 6.5% interest rate, and you get enough seller credit to cover a 3-2-1 buydown, your interest rate for the first year will be 3.5%! That’s unbelievable, especially in today’s market. We covered how rate buydown programs covered by seller credit are helping families make their home buying dreams a reality last week. If you’d like to read more about rate buydown programs, CLICK HERE

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Down Payment Assistance Programs (DPA)

From forgivable grants to CalHFA programs, there are many options that offer down payment assistance programs (DPA) to help you overcome the hurdle of saving for a large down payment. These programs are designed to help you get into your home. There are a variety of down payment assistance programs. If you’d like to learn more about them, contact us, or if you’d like to read more about down payment assistance programs, CLICK HERE.

The Takeaway

With low down payment options like FHA offering as little as 3.5% down, Conventional as low as 3% down, and VA and USDA as low as $0 down, a significant amount of savings is not necessary to purchase a home. Additionally, seller credit and rate buydown programs can reduce the amount of money needed at closing, and down payment assistance programs such as forgivable grants or CalHFA programs can help with down payments and closing costs. With these options available, you truly don’t need as much as you may think to buy a home. 


We can always assist you if have any further question. Contact us today.



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