Low Down Payment Loan Options Can Help Save Thousands

If you’re in the market for a new home but don’t have a lot of money for a down payment, an FHA loan is an outstanding option—offering a low down payment of 3.5% vs. the traditional 20%.

An FHA Low Down Payment Mortgage Might Be Right for You

For more than 75 years, FHA (Federal Housing Administration) low down payment loans have helped millions of people realize their dreams of owning a home. In its current state, the FHA backs investor-funded low down payment loans that promote home ownership to those with limited assets or a low-to-moderate income.

An FHA low down payment mortgage lets borrowers put down as little as 3.5%, with a 1% funding fee that may be rolled into the loan cost with monthly mortgage insurance.
These low down payment mortgage options can have fixed or adjustable rates, and borrowers may choose a loan term that best suits their needs, with 15 and 30-year terms are the most common.

Limitations and Fees for an FHA Low Down Payment Mortgage

Limitations

Unlike USDA loans, there are no geographic or income limitations on FHA low down payment loans. There are loan amount restrictions and county-by-county limitations based on the median loan amount in that particular area. A DNJ Gateway Mortgage loan specialist can provide more information about limits in your state of Maryland, Virginia, North Carolina, South Carolina, Georgia or Florida.

Like any loan, there are also credit score and housing/debt ratio limits put in place that determine a borrower’s eligibility to repay the loan. The standard housing/debt ratio limit is 29/41.

Fees

The good news is that the 1% funding fee which keeps the program alive and funded may be rolled into your low down payment loan amount. For example, you may be buying a home for $200,000. The funding fee would be $2,000, so the amount you will be borrowing is $102,000. And if you’re interested in purchasing a home with money from an immediate family member, you’re in luck – the FHA allows gift money on all purchases!

See If a Low Down Payment Mortgage Is Right for You

To learn more about an FHA low down payment mortgage for your home purchase in Maryland, Virginia, North Carolina, South Carolina, Georgia or Florida, make an appointment at one of our convenient North Carolina offices, or contact us toll free at 877-9-NO-COST (877-966-2678)!

DNJ Gateway Mortgage proudly serves clients in Raleigh, Durham, Chapel Hill, Cary, Apex, Greenville, Fayetteville, Fort Bragg, Greensboro, Winston Salem, High Point, Wilmington, and Charlotte, NC, and surrounding areas. We also offer mortgages in South Carolina, Virginia, Maryland, Georgia and Florida.