How to Get a House With a Small Down Payment


It’s no surprise that so many people have home ownership as one of their top goals in life.  People enjoy the idea of having a place to themselves, somewhere that they can change anything and build any idyllic life they’d like to live.  Monthly payments can be low, in some areas more economical than renting is, so buying a house would be perfect- if it wasn’t for the upfront cost.

If a down payment is the only thing keeping you from buying that house of your dreams, here are a handful of options to make it easier for you.

Look for a Loan

A loan is an obvious answer that takes care of your immediate problem but raises another one in its place.  Only get a loan for what you can’t afford in your down payment.  You’ll end up having to pay interest in the long run, so it’s better to get as small of a loan as necessary to make sure you won’t have to pay off more than you can afford.

Home Buyer Assistance Program

If your household could be considered moderate to low-income, there’s a chance you could get accepted by a home buyer assistance program.  These programs allow families that wouldn’t be able to afford homes to have the funds to make that change.  These exist more often in more substantial cities since more people need homes.  If you go over how much you’ll have to pay for a house, using a house payment calculator may help, and find yourself coming up short- it’s okay to ask for help.  Asking for help buying a home isn’t something to be too proud to do.

Have Seller Pay Closing Costs

Closing costs, all things considered, can add up to 7-9% of the price of your home.  These costs include legal fees, paying for your realtor, and local taxes that might go into it.  Having the seller cover these costs can help with your upfront payments and may help you be able to afford the down payment for the house.

Choose Your Mortgage Carefully

Mortgages are responsible for so many people getting the chance to buy a home.  Not only do they front most of the money, but they also have a variety of options to let you choose which suits your needs.

The Federal Housing Authority offers a mortgage with a far lower down payment  FHA loans start at a 3.6% down payment, while the average mortgage besides it usually stands at about 20%.  This percentage means that instead of having to front $40,000 for a $200,000 home, you’ll only need to be able to secure $6,000.  That payment is far more affordable.  The drawback is that you’ll have to pay mortgage insurance- which on a $200,000 home would be around $2,000 a year.

Whether or not that extra couple thousand a year is worth it, it’s up to you.

Everyone deserves space that they can call their own.  Consider these options, and you may find yourself closer to home ownership than you expected.


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