Mortgage Down Payments
When it comes time to buy a home, the most important question most buyers have is “how much money do I need for a down payment?“.
Like most things in real estate, the answer is…it depends. But there are some broad guidelines that can help you have a savings target so you can buy your next home.
If you’re using an FHA loan to finance your purchase, the required down payment is 3.5% of the purchase price. Example: A $200,000 purchase would require a down payment of $7,000.
One of the perks of VA financing is that there is no required down payment. The VA offers 100% financing to veterans.
USDA (Rural Development Loans)
RD loans, like VA, have no required down payment. But there are lots of other rules, including income limits and required property locations. RD loans cannot be used in Orleans Parish, but they can be used in Plaquemines, St. Bernard, and the West Bank of Jefferson Parish.
Down payment requirements for conventional loans will vary from lender to lender, but a safe bet for savings is 5-10% of the purchase price.
Second or vacation homes
When buying a second or vacation home, most lenders will require a 20% down payment.
What else do you need to know?
In addition to the down payment, you’ll need to save for inspections and closing costs as well. Have more questions about buying a New Orleans home? Call us today at 504-327-5303 and we’ll be happy to provide answers.