I read an interesting study that half of Millennial homebuyers plan to ask their parents to help with the down payment. Whether you are 20-something or a bit older, many first-time homebuyers in Virginia Beach, Norfolk, and Chesapeake, might not know the various down payment requirements.
Here’s the breakdown:
VA Loan (Veterans Administration) — available to military personnel and veterans.
Only used for a primary residence. There’s a 0% down payment as long as the value of the house is below a certain threshold (based on the city where it’s located). For most of Hampton Roads, the limit is $458,850. For more on VA Loan limits, read this.
FHA Loan (Federal Housing Administration) — available to the general public.
Only used for a primary residence and requires a 3.5% down payment.
Conventional Loan — available to the general public.
Can be used for primary residence, second home or investment property.
To avoid PMI (what’s PMI?), you need to put down 20%, but make sure your clients speaks to the lender about different program and requirements. Some lenders will accept as little as a 5% down payment depending on the occupancy, credit scores, etc.
Featured photo: Flickr