Not ready for a large down payment?

There are options that can make you a home owner with a low down payment.

Deciding on how much money to use as a down payment can be confusing. Greenly Mortgage LLC is here to help. The route for each buyer or investor depends on their situation and personal preferences.

Low Down Payment Options

FHA Loan

With an FHA loan, you can buy a single-family home or condominium with as little as a 3.5% down payment. However, there’s a trade-off for lower down payments on conforming loans: mortgage insurance, also known as PMI (private mortgage insurance).

Mortgage insurance is required when the loan amount exceeds 80% of the purchase price (meaning the down payment is less than 20%). Additionally, the smaller the down payment, the higher the PMI premium rate will be.

VA Loan

Military veterans who qualify for a VA loan can purchase a home with no down payment required. VA loans provide up to 100% financing for eligible military personnel and veterans.

In addition, non-conforming mortgage loan programs offer 80/20 setups, allowing borrowers to take out a second mortgage to cover the 20% down payment.

Have less-than-perfect income or credit? We may have a program that fits your needs!

How much should I use for a down payment?

Every option, including those with low down payments, comes with its own costs and benefits. It’s important to carefully evaluate your choices and consult with a professional.

Speak with one of our loan specialists today to create a tailored solution that suits your needs and budget.

Personal Consideration

Take time to carefully consider how much you want to put down. While your lender will qualify you for a specific amount based on your income, it may differ from the amount you're comfortable paying each month. It's important to determine what you can truly afford. Consult with your loan officer at Greenly Mortgage LLC to find the best option for you.

Cost of a Lower Down Payment

Low or no down payment programs come with two main costs that can lead to higher monthly payments:
- Higher interest rates.
- Higher mortgage insurance premiums.
Mortgage insurance can be eliminated once sufficient equity is built up. For instance, if your property reaches at least 20% equity after a few years, you may be able to refinance and remove the mortgage insurance.

Benefits of Lower Down Payments

While the disadvantages of low down payments are important to consider, there are also significant advantages. Take the time to weigh both sides and determine what works best for you.

The main benefits of a lower down payment include:

  • Less money required upfront at the time of purchase.
  • Higher rate of return. The appreciation of your property is the same whether you put 3%, 5%, or 20% down. In fact, your rate of return tends to decrease with a larger down payment, as explained below.
  • Opportunity cost. In some cases, a smart investor can generate greater returns by investing available cash elsewhere.

In the early years of your mortgage, most of your monthly payments go toward paying interest, which is often tax-deductible. As a result, you can recoup a significant portion of your payments through tax deductions at the end of the year.

Personal Consideration

Take time to carefully evaluate how much you’re comfortable putting down. While your lender will qualify you for a certain loan amount based on your income, it may not align with what you’re comfortable paying each month. It’s essential to determine what fits your budget.

Consult with your loan officer at Greenly Mortgage LLC to explore the best options for your situation.

Frequently Asked Questions

Why choose Greenly Mortgage?

At Greenly Mortgage, we understand the ins and outs of mortgage financing and we know the importance of savings. Greenly Mortgage has worked hard to build a company full of mortgage experts and people experts, meaning we understand that a mortgage isn’t just a loan, but a step towards the dream of homeownership, and a cash-out refinance isn’t just a lower rate, but a means to send your children to college. We get it. We use our advanced technology to provide low rates, transparent pricing, easy online applications, and most importantly great client service.

We offer the following loan options:

Fixed Rate Mortgage

Federal Housing Administration (FHA)

First-Time Home Buyers.

Jumbo Home Loans

Veterans Affairs

Rehab 

Low Down Payment Options

Investment Property

Refinance

If you are looking for a loan not listed here, please contact us. We will be happy to help you and guide you on your mortgage journey.

Yes, we can do construction loans for the builder, and the borrower.

A 580 score is needed for FHA. If you have a score lower than that, please reach out to us and let us figure out what is best for you.

Ohio and Florida

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