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Do homebuyers really need to put 20% down a home?
Many times when I speak to clients about down payments, they seem to be under the impression that you need to put 20% down to buy a home using a conventional loan. Today we’re here to explain why that simply isn’t true.
If you put less than 20% down with a conventional loan, you’ll have to pay for private mortgage insurance (PMI). If you put more than 20% down, you won’t have to pay for PMI.
However, both Fannie Mae and Freddie Mac have conventional loan programs that could allow you to put as little as 3% down. Keep in mind that those programs are limited by income; if you make too much money, you may not qualify. Fannie Mae also has a conventional program where your income won’t matter in terms of qualification as long as you’re a first-time buyer.
Many programs that don’t require 20% down are available to buyers.
As brokers, our job is to shop around and help you figure out which loan program best fits your financial needs. If you’re thinking about buying a home and worry about finances, give us a call or send us an email. We’d be happy to help you.