Severna Park Home Buyer's Guide Tip of the Month Maryland

How Much Cash Will You Need For the Down Payment?

Down payments vary from zero to as much as you wish to put down. If you are a veteran with at least 181 days of continuous active service and have been discharged or released under conditions other than dishonorable, you may qualify for a VA loan that requires no down payment. If you are active duty you are eligible after 90 days of continuous active duty. If you were discharged due to a service connected disability or are the surviving spouse of a veteran killed in duty, you may be eligible under different criteria. Ask your lender or real estate agent.

FHA loans are government insured loans primarily for first time home buyers. The down payment is 3% of the first $25,000 and 5% on the remainder. FHA, unlike other loans, will allow 100% of the down payment to be a gift, sweat equity, or a secured loan. FHA also allows you to finance some of the closing costs (see below) which cuts back on the amount of cash you need.

A normal conventional loan requires 5% - 20% depending on the sales price and source of the loan.

At any given time there are over 100 special loan programs. One of them will be just right for you.