4 down payment tips for millennials
Conventional wisdom says a 20% down payment is necessary to comfortably purchase a house, but that’s not always the case.
You can still ace the homebuying process without putting 20% down. These four tips could help you achieve down payment delight and get you one step closer toward your dream home.
Do your research
It’s crucial to be informed before you start looking for a home. Start the process by calculating how much you can afford for a monthly payment. Include your salary, taxes, potential living expenses and insurance into the equation to get a precise estimate. Once you’ve done this, you can make an informed decision as soon as you find the home of your dreams.
Don’t break the bank
It’s good to cast a wide net at first. But once you discover approximately how much home you can afford, it’s important to refine your search to properties within your price range. It’ll make the home search much easier if you focus on properties that fit your financial needs.
Talk to the Home Purchase Experts*
Have a trustworthy ally by your side when you embark on the homebuying process. Speak to a Guaranteed Rate loan officer about pre-approval and our down payment assistance programs. Our team of experts will ensure you’re prepared to confidently make one of life’s biggest purchases. Don’t go at it alone. Your Guaranteed Rate loan officer will have your back every step of the way.
Take advantage of low down payment assistance options
Guaranteed Rate’s down payment assistance programs can make buying your dream home a reality. These programs allow you to put less than the conventional 20% down on your new home:
- Give 2 You – Buy a home with 3% down and Guaranteed Rate will kick in a grant for 2% of your purchase price**
- HomeReady – A mortgage program with a low 3% down payment option from Fannie Mae that helps borrowers of low-to-moderate incomes
- HomePossible – A Freddie Mac program with down payment options as low as 3% for borrowers in high-cost or under-served communities.***
- Fannie Mae 97%3 & Freddie Mac HomeOne - Programs backed by Fannie Mae and Freddie Mac for first-time and repeat homebuyers with minimum down payment options of only 3% and no income restrictions. ****
Don’t wait any longer. You can find your dream home with a flexible down payment plan today!
*Home Purchase Experts is a registered trademark of Guaranteed Rate, Inc. and used under license.
Qualifications: Qualifying borrowers must make less than 100% of area median income in their county; min 620 FICO score; homeownership counseling required for first-time homebuyers. No income limit if the Mortgaged Premises are located in an Under-served Area; min 620 FICO score; at least one borrower on each purchase transaction must complete Framework® online education course.
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, contact Guaranteed Rate for current rates and for more information.
**It is important for you to know that the smaller your down payment percentage, typically, the higher your interest rate. Down payment assistance cannot exceed 2% of the purchase price. Maximum grant allowance is $10,000. Minimum credit score and debt-to-income (DTI) requirements, annual income limits and purchase price limits apply. Not all applicants will be approved. Receipt of application does not represent an approval for financing or interest rate guarantee.
Example: Sample monthly Principal and Interest (P&I) payment of $1,330 is based on a purchase price of $250,000, down payment of 5% (3% provided by borrower and 2% provided by Guaranteed Rate), 30-year fixed rate mortgage (360 monthly payments) and rate of 5.375%/6.197% APR (annual percentage rate). Advertised rates and APR effective as of October 1, 2018 and are subject to change without notice. Subject to underwriting guidelines and applicant’s credit profile. Sample payment does not include taxes, insurance or assessments. Actual payment obligation will be greater. Not all applicants will be approved. Restrictions apply. Contact Guaranteed Rate for more information and up-to-date rates.
***Credit and loan limit restrictions do apply.
**** Applicant cannot own any other property at time of closing. Homebuyer education/counseling may be required.