You Don’t Need 20% Down To Buy a Home in Louisiana

Skip the myth and see how first time home buyers are buying homes
with an average of 6%-7% down.

For decades, the golden rule of home buying has been that you need a 20% down payment. It’s a daunting figure that has stopped countless potential homeowners in their tracks. But what if that rule was more of a myth? The truth is, you don’t need 20% down to buy a home. In fact, waiting to save that much could be costing you more in the long run. Let’s break down the reality of down payments and how you can unlock homeownership much sooner.

Why the 20% myth persists. The idea of 20% down stems from one main factor: avoiding Private Mortgage Insurance (PMI). Lenders require PMI on loans where the borrower puts down less than 20% to protect themselves from default. While putting down 20% has benefits, such as no PMI, a lower monthly payment, and better loan terms, it is far from a requirement for securing a mortgage.

Loan programs that make it possible. The modern mortgage market is designed to make homeownership accessible. Several key loan programs allow for low or no-down-payment options:
• Conventional Loans: With good credit, you can put down as little as 3%.
• FHA Loans: A popular choice for those with lower credit scores, requiring only 3.5%down.
• VA Loans: An incredible benefit for veterans, active military, and eligible spouses, offering 0% down payment.
• USDA Loans: For those buying in designated suburban and rural areas, 0% down payment options are available.

When does 20% make sense? While not necessary, there are scenarios where a 20% down payment is advantageous. If you can afford to put down 20% without depleting your emergency savings, it will result in the lowest possible monthly payment and help you avoid PMI. It’s a smart move if you plan to stay in the home long-term. However, for most buyers, preserving cash for repairs, emergencies, and life events is a higher priority. And the truth is, many first time buyers can buy a home with no money down!

The bottom line. You have options. The dream of homeownership doesn’t have to be delayed for years because of an outdated rule. By understanding the different loan programs and working with an expert, you can find a path that gets you into your new home without a massive upfront investment.

Don’t navigate the complex mortgage landscape alone. I’m here to explain your options and find the right loan for your life. Call me at (985) 218 5445, email me at TGroup@kw.com, or visit www.FindNolaHomes.com. Let’s make your dream of home ownership a reality today.

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PLACE provides value to our clients by connecting them with industry leaders who waive unnecessary fees and charges, employ state-of-the-art search technology, guarantee transaction transparency, and provide a consistent experience to buyers and sellers in any price point in any geographic location in North America. 

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GREGG TEPPER
THE TEPPER GROUP

(985) 789 8717
TGroup@kw.com
www.FindNolaHomes.com

Keller Williams Realty Services
1522 West Causeway Approach Mandeville, LA 70471  
985-727-7000

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