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Down Payment Options

Getting Started

The Down Payment is the initial amount of money used for the purchase of a new home. The traditional thinking has been that lenders always require 20% of the sales price for a down payment, but that is not the case. There are a number of loan programs that require as little as $0 down payment. Be sure to talk to multiple lenders about all available loan programs and down payment options.

To get started, determine how much money you have to use for the purchase of your new home:

  • Gather your savings and investment statements
  • Add up your total available funds
  • Decide how much you want to set aside for other savings goals or moving costs
  • Subtract these costs from your total available funds
  • The result: the amount of cash you have available to use toward the purchase of your new home

 

Estimate Your Costs to Close

In addition to your down payment, there are many costs associated with "closing" or finalizing your loan and home purchase. Closing costs depend on a lot of things – the price of the home you buy, your down payment amount, the lender costs, the kind of loan you choose, and the location of your new home. Since you’re still early in the process, it’s hard to make a precise estimate at this stage.

  • You can make a rough estimate now, using a home price that is typical for the neighborhoods you’d like to live in. Come back and refine your estimate as you move forward and gather more information.
  • Typically, closing costs (not including your down payment) range from 1.5-3% of the purchase price.

 

Determine Your Down Payment

It is easy to determine your maximum down payment amount. Just subtract your closing costs estimate from your available cash for closing, and the remainder is what’s available for your down payment. Remember, you will have both Down Payment and Closing Costs to pay for at closing, so be mindful about this when discussing with your lender.

Other Important Considerations

Low down payment or zero down payment options may be available to you

 

  • There are special programs for veterans and service members, rural residents, some types of first-time homebuyers, and others. Beazer’s Choice lenders can help you determine what programs are available for you in your area.
  • Individual lenders may also offer their own low- or no-down payment options.
  • Low-down payment options may come at an increased cost. When you meet with lenders, ask to see multiple options and ask questions until you are comfortable.