Affording a single-family home these days has its joys and its challenges. If you are financially savvy, it is possible to comfortably own and maintain your dream home no matter what the economy is doing. In Glen Burnie, Maryland, Ameri-Star Homes aims to build exceptional, customizable, and affordable new construction homes in central Maryland. What about that 20 percent mortgage downpayment? How does that factor in? Learn more about it right here, and feel free to ask us any questions you have.
Do You Have to Put Down 20% on a House?
You do not necessarily have to put a 20% downpayment on a house. It is a common myth that many believe, but more and more are discovering it is not so. It depends on the type of loan you take on.
- Conventional: A conventional loan is what many people are taking on when buying a house in recent years. It is possible to put down as little as 3-5%, but you will need to pay Private Mortgage Insurance (PMI) until you reach 20% down.
- VA: VA loans are for veterans and allow them to purchase a home with 0% down.
- USDA: USDA loans are for moderate-to-low-income buyers looking to purchase a home in a rural area. They can pay 0% at the start of their homeownership.
- FHA: An FHA loan is backed by the Federal Housing Administration and has more flexible credit requirements. You can have a minimum 3.5% downpayment.
- Jumbo: Jumbo loans are for homes over a certain price point and can require either a 20% downpayment or a 5-10% downpayment.
Benefits of Making a Smaller Downpayment
- More liquidity: You have more cash immediately at your disposal for emergencies, investing, daily expenses, etc.
- A potentially safer investment strategy: If the market dips, you lose less of your initial investment and can refinance later at a lower rate.
- Quicker homeownership: You can own a home sooner if you take on a loan rather than saving up 20% or more.
Benefits of Making a Larger Downpayment
- Lower monthly payments: If you have a lower income, this strategy is highly advantageous.
- More desirable to sellers: Being able to put down more equity in a home at once can make you a stronger candidate to sellers.
- Peace of mind: The sooner you can pay off your mortgage, the sooner you can be free of that additional payment.
Let Ameri-Star Homes Build Your New Custom Home!
Ameri-Star Homes was built on the idea that a home is not complete until the homeowner is 100% satisfied. That’s right, completely satisfied homeowners. Whether you want a home built on one of our home sites or on your own land, count on the same high quality from Ameri-Star. We have set out to exceed all your expectations of integrity, affordability, and customer satisfaction. Build lasting memories for years to come with Ameri-Star Homes.
For more information, contact us today at 410-590-1000 or through our contact page. For more helpful custom home tips, keep in touch with us through Facebook, Twitter, LinkedIn, Instagram, and Pinterest!