Getting a Mortgage:

The downpayment is an amount of money required by the lending institution to go along with the loan to complete the total cost of the purchase of a house. All credit purchases generally require a down payment.

The downpayment required for a mortgage varies with the type of mortgage you are getting and your credit. You will generally be required to bring a minimum of 5% of the purchase price to the closing in the form of a downpayment. Closing costs are in addition to the down payment, and may be paid by the seller (this is negotiable between the two parties; ask your HomeBuyer Specialist for his or her advice regarding closing costs).

Persons who qualify for FHA loans will only need to make a 3% downpayment, and a portion of this may be in the form of a gift from specific individuals. There are very stringent rules governing who may make the gift to the home buyer.

Also, some banks and mortgage companies offer a "Community Homebuyer Program" which is designed for low-income families. These loans typically require a lower down payment (generally 3% of the purchase price) and qualification ratios may be less stringent.

Everyone has heard of the VA-no money down loan programs. Veterans with a specific amount of service qualify for these loans that are underwritten by the Veterans Administration. Indeed, no down payment is required.

And finally, there are a variety of special programs for certain groups that are 100% financing, with no down payment required. They generally have income ceilings and may apply only to certain affinity groups; however, there are some programs of this nature designed specifically for doctors, teachers, nurses, and other professions.

In general, the amount of the downpayment that you make should be considered from multiple angles. Your lender is best qualified to tell you the pros and the cons of low-down payment loans.

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