You must also have an annual income that’s low or moderate for the area where you’re buying. However, your occupation doesn’t have to be connected to agriculture in any way. To qualify for a USDA loan, you must purchase a property in a designated rural area. Similar to a VA loan program, USDA loans allow for a 0% down payment, although you will still be responsible for covering the closing costs out of pocket. Department of Agriculture as part of its rural development program. If your credit score is lower, it is advisable to explore different lenders. Some mortgage lenders are happy with a credit score of 580, but many prefer 620-660 or higher. Typically, veterans, active-duty service members, members of the National Guard, reservists, and certain surviving spouses are eligible for this type of loan.Īdditionally, you’ll need to maintain an “acceptable” credit history. The VA has strict guidelines governing its issuance. To get a zero-down VA loan (backed by the Department of Veterans Affairs), you need a Certificate of Eligibility (COE). But let’s take a deeper dive into the requirements for low- and zero-down mortgages. We’ve already mentioned some of the restrictions on certain types of loans. Lenders carefully assess factors such as credit score, gross monthly income, and overall debt obligations to determine your home loan eligibility. What’s the minimum amount you can put down?Įach individual’s home buying journey is unique, and securing a suitable mortgage loan will largely depend on your financial situation. These valuable DPA programs can put homeownership within reach for first-time buyers who can easily afford mortgage payments but face challenges accumulating funds for the upfront costs. In some cases, these programs may even contribute to closing costs. Various down payment assistance programs (DPAs) are accessible across the country, offering grants or loans to assist you in meeting a portion or all your down payment needs. As a rule of thumb, the more cash you put down, the lower your interest rate is likely to be.īut even if you come up short of 3% or 3.5% down, you may have options. But you may find lenders that allow you to borrow a second mortgage to bridge the gap between your savings and that 20%. If you want to avoid private mortgage insurance (PMI) you need 20% down. You need to purchase in a designated rural area and have a low-to-moderate income for the area where you’re buying Only available to military service members and veterans who have reached minimum service thresholds. Your credit score may be as low as 580 if you have a 3.5% down payment Backed by the Federal Housing Administration. A loan that conforms to Fannie Mae and Freddie Mac’s guidelines, including a minimum credit score of 620 Let’s take a closer look at how much you would need to put down for a $300,000 home with each of the five major loan programs: The down payment amount you’ll need depends on the type of mortgage loan you choose. >Related: How to buy a house with $0 down: First-time home buyerĭown payment requirements for a $300K house Read on to learn how to determine the optimal one for you. The key lies in choosing the down payment amount that aligns best with your circumstances. However, if you have a down payment of 20% ($60,000), you could potentially save a substantial amount on mortgage insurance and interest charges. While some may require no down payment at all, most will need at least 3% of the purchase price ($9,000) or 3.5% ($10,500). How big of a down payment do you need for a $300K house? That’s going to depend entirely on the type of mortgage you choose. 12 min read Down payment options for a $300K house
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