If you’re like many renters, you really want to buy a home – but you don’t have enough cash to put down a 20 percent down payment.
The good news: You can still swing it.
What if You Don’t Have 20 Percent Down?
Sure, 20 percent is the “gold standard” in buying a home. That means you pay 20 percent of the home’s purchase price up-front – but it’s not always necessary.
In fact, according to the National Association of Realtors(R), about 81 percent of Americans buy their first home with less than 20 percent down.
There are homebuyer programs that let you buy with as little as 3 percent down – and if you’re a qualifying veteran of the U.S. Armed Forces, you could qualify to put nothing down by using your VA loan.
But that aside, you need to know there are some disadvantages to buying with less than 20 percent down, including:
- A private mortgage insurance requirement. Your lender will most likely require you to buy PMI to protect the lender’s investment in your home.
- You’ll have to take out a larger mortgage, which raises your monthly payments.
- You may have to deal with higher interest rates and less-friendly terms than you would have if you put down more money.
Are You Buying a Home in Aspen or the Surrounding Communities?
We’d love to help you find your dream home here. Call us at 970-429-8275 or contact us online to let us know what you’re looking for so we can start searching right away.
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