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Do you always have to have a down payment? How do you save $70000 for a 20% down payment?

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July 15 2013 - Lafayette
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I would speak with an experienced loan officer as there are loan programs that may be able to help. It sounds like you need a one on one conversation to figure out what your options are. As always credit history will play a role on what is available to you and what you may have to put as a down payment. 
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July 25 2013
Profile picture for skinnerback
As stated by others, you do not have to have 20% down. My current home and the home I am currently under contract to purchase both have been financed with a 30-year conventional with 5% down. You will have to pay PMI until you have paid 20% of the loan down. With an FHA loan you will pay the PMI for the life of the loan.
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July 25 2013
 One of the main reasons people choose conventional is to avoid the premiums associated with mortgage protection insurance
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fortunately there aren't any mortgage programs that require mortgage protection insurance.

 Conventional loan programs range from 5%, 10% and lastly 20% down
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well actually they range from 0% down.......

though conventional-conforming loans generally require at least 3% down.
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July 16 2013
Profile picture for wetdawgs
How does one save?  By careful budgeting and putting saving as the first priority.   Yes, it takes time, but planning ahead for home purchase make sense.

One doesn't have to have a 20% down payment.





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July 16 2013
There is a wide range of mortgages available.  Speak with an experienced loan officer and they can guide you to the best solution for your particular situation.
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July 16 2013
 As stated by Wendy and Mary, there are many programs that require less than 20% down payment. The more you put down, the lower your monthly payment. As always, your credit history and score will be the determing factor as to which programs you may qualify for.
  I would be glad to run through the different types of programs with you. My contact info is located in my profile.
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July 16 2013
Also 5-10% conventional programs save with PMI amount paid monthly. It is reduced in comparison to the FHA mortgage protection insurance
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July 15 2013
The only types of loans that require little out of pocket is FHA 3.5% down. The other types of loans that often allow 100% financing is USDA rural development loan which is limited to specific rural areas. Then there is V.A. Loans that offer 100% financing. Conventional loan programs range from 5%, 10% and lastly 20% down. One of the main reasons people choose conventional is to avoid the premiums associated with mortgage protection insurance. If you choose a 5% or 10% you would still have PMI, however, it is not nearly as substantial as it would be with an FHA mortgage loan, which in essence on a 190k purchase can run roughly about $237.00 per month for the life of the loan. Saving 70k can be tricky, however it can be done with patience. Biggest thing is to create a game plan and stick to it. If your purchasing a 350k home than you can try to get by with the 10% down program but bare in mind it is "credit qualified" too. You would still have PMI, however, with conventional it is able to be cancelled after you reach 22% equity, however, you have to write the mortgage company to request the PMI be terminated. Talk with your lender further and find out what other options could be worth your investigating. I hope this helps to guide you in the right direction Sincerely, Mary Dover
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July 15 2013
There are still many programs available for mortgages.  You mention 20% down.  That's still the ideal but there are programs with loans such as FHA loans where as little as 3.5 percent is required. There are many factors including what your credit score is.  The best thing to do before you even start your home search is to speak with a mortgage professional.
I am a realtor in Bergen County New Jersey and would be happy to help you in this area.
If you are located elsewhere, you can also contact your local bank to see what kind of mortgage programs they offer.
All the best,
Wendy
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July 15 2013
 
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