Friday, March 31, 2017

First time home-buyers have been trained to believe that in order to purchase, they need to put 20% down and obtain a traditional 30-year fixed rate mortgage.  But, for us Millennials, who are burdened with exorbitant student loan and rental payments, purchasing can feel like an unattainable goal. I’m here to dispel the myth and tell you that there are plenty of options for those who, like many of us, do not have a large savings account.

FHA loans allow you to put very little money down, even as low as 3.5%, however, you will be required to pay Private Mortgage Insurance (“PMI”) in addition to your monthly loan payments.  VA loans which are loans for service members and their families and USDA loans which are for rural housing, both require 0% down and sometimes even no PMI payments.

Another popular loan structure that you should speak to your lender about is obtaining two mortgages.  The first being a conventional loan of 80%, and then a second ‘interest only’ home equity loan for the remainder of the funds you need to close.  This allows you to put significantly less than 20% down and avoid paying PMI. 

What’s important is that you find the right loan structure for your financial circumstances. For more of the reasons why you may want to consider putting less than 20% down, check out the following Forbes article: (

Give us a call, we can help provide you guidance in making this important decision and point you in the right direction!

Attorney Dominic Poncia

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