Buy A Home For 1% Of Purchase Price
As a Naperville Mortgage Lender, we are often asked how much money is needed for a down payment when buying a home. We advise our clients that there are "3 Buckets of cash" needed for every purchase transaction:
1. Down Payment – Bucket #1
2. Closing Costs – Bucket #2
3. Prepaids/Escrows – Bucket #3
We will discuss all three buckets in our new blog series. Today, we will focus on Bucket #1, Down Payment, and who pays for it. Depending on your credit score, you, the borrower, may qualify for a Conventional loan program that has a minimum down payment of 3% to 5% of the purchase price. For example, FHA loan programs allow a borrower to put down as little as 3.5% of the purchase price as the minimum down payment. So, to buy a $200,000 dream home, you would need a down payment of $7,000 to meet the 3.5% down payment requirement ($200,000 X 3.5% = $7,000). What if you did not have $7,000? Not to panic.
Another option is if your household income is less than $101,520* and your credit score is 640 or better, you could qualify for down payment assistance. If you qualify, you only need to put 1% of the purchase price into the transaction. This means that $7,000 of the down payment needed to purchase that $200,000 dream home can be paid by $5,000 from IHDA and only $2,000 from you (contact us to learn about IHDA). Amazing… only $2,000 to buy a $200,000 home!
In addition, your Naperville mortgage loan officer can now offer $6,000, $7,500 or $10,000 in down payment assistance! We can do this through grants or zero interest loans for first time homebuyers AND existing homeowners... Amazing! Your journey to home ownership just got easier.
See if you qualify for down payment assistance or any of our financing programs, by clicking here.
If you have any questions regarding the home buying process and how your Naperville Mortgage Lender can qualify you to buy a home for 1% of the purchase price, please contact your Naperville Mortgage Loan Officer for more information by clicking here.
We will talk about Bucket #2 – Closing Costs and 'who pays them' in our next Blog.
* for DuPage county and collar counties. Could be more or less in other counties.
The Marino Lending Team
630.788.7859 (Mobile) | 630.983.3604 (Office)
NMLS ID #209516 | License: IL #031.0002979
847.804.1059 (Mobile) | 630.806.2870 (Office)
NMLS ID #244399 | License: IL #031.0037907
815.757.6944 (Mobile) | 630.947.0562 (Office)
NMLS ID #1542842 | License: IL #031.0045066
651 N. Washington Street
Naperville, IL 60563