- LendingTree.com Shares Top 3 Options When Buying Home with Low Down Payment

Tuesday, 22nd May 2012

home about authors news books xml feed sitemap privacy contact us

There are 16 users online

Mortgages
Agents and Brokers
Commercial Real Estate
General
Home Buyers
Home Furnishings / Interiors
Home Owners
Home Related Services
International Real Estate
Local Real Estate News
Property Maintenance
Property Sellers
Real Estate Education
Real Estate Industry
Real Estate Investing
Real Estate Law
Rental and Income Property
Retirement-Senior Housing

Our Newsletter

Subscribe
Unsubscribe

Voting Poll

If you had $20,000 to spend, which room would you do a makeover on?
	Bathroom
	Family Room
	Kitchen
	Living Room
	Master Bedroom
	Other Bedroom
	Outdoor Kitchen

Other Resources

For other sources of real-estate news, tips, and information, visit our resources page

Submit an Article

Would you like to have your article posted? Click Here

LendingTree.com Shares Top 3 Options When Buying Home with Low Down Payment
Added: 01/11/2007 Type: Summary Viewed: 413 time(s) [ Not Rated Yet ]

How would you rate this article: Bad Good Go ť

Printer Friendly Version

LendingTree.com Shares Top 3 Options When Buying Home with Low Down Payment

If you're getting ready to purchase the home of your dreams but don't have the much sought after 20 percent down payment, don't worry - you have options. LendingTree.com shares the following three options available for low down payment alternatives.

1. Private Mortgage Insurance
One option is to obtain a loan with private mortgage insurance (PMI). PMI is extra insurance that lenders require from most homebuyers who obtain loans that are more than 80 percent of their new home's value. In other words, buyers with less than a 20 percent down payment are normally required to pay PMI. PMI enables borrowers with less cash to have greater access to homeownership. With this type of insurance, it is possible for you to buy a home with as little as a three percent to five percent down payment. Rather than waiting years to accumulate a large down payment, you can buy a home much sooner by using PMI. New legislation recently passed allows PMI to be deducted on your tax returns. Be sure to ask your lender about this.

2. Piggyback Loans
Piggyback loans are an alternative to PMI and another option for those who have a low down payment. These are named piggyback mortgages because a second mortgage is "piggybacked" onto the original mortgage. This can be a less expensive option because the homeowner will be avoiding PMI all together. How it works is the original mortgage and the second mortgage is closed simultaneously. The first loan is for 80 percent, the second is often times for five to 10 percent and the rest is paid by the homeowner as a down payment.

3. FHA Loans
For those with less than perfect credit, obtaining a FHA loan may be a good option. The Federal Housing Administration does not fund the home loan, they insure it so your lender can offer you a better deal. This type of loan allows your down payment to be as low as three percent and you can include most of your closing costs in the loan if necessary. The FHA loan program is a great way for homebuyers with a shortage of down payment funds to buy a home.

Article Pages: 1

Article Comments

Add Comment |

View All (0)

There are currently no comments for this article.

Advanced Search