WHAT CLIENTS ASK THE MOST

What You Should Know

DO I NEED TO PUT 20% DOWN?

Most people don’t put 20% down on a home, even though it’s an oft-quoted benchmark. For first-time home buyers, the median down payment was 7%, according to a 2018 survey by the National Association of Realtors. The median down payment for repeat buyers who financed was 16%.

The minimum down payment for a house depends on the type of loan and a lender’s requirements. Here are the minimum down payment requirements for the most common types of loans.

  • Conventional loans, which aren’t guaranteed by the federal government, can have down payments as low as 3% for qualified buyers. There is also down payment assistance grants which allow even lower down payments.

  • FHA loans, backed by the Federal Housing Administration, require a minimum 3.5% down. FHA loans allow lower minimum credit scores than conventional loans.

  • VA loans for military service members and veterans, and USDA loans for certain rural and suburban buyers, usually require no down payment. VA loans are backed by the U.S. Department of Veterans Affairs, and USDA loans are guaranteed by the U.S. Department of Agriculture.

WHEN SHOULD I REFINANCE?

It makes sense to refinance a home when it will save you money or make paying your monthly bills easier.
Some experts say you should only refinance when you can lower your interest rate, shorten your loan term or both. That advice isn’t always correct. Some homeowners may need short-term relief from a lower monthly payment, even if it means starting over with a new 30-year loan. Refinancing also can help you access the equity in your home or get rid of an FHA loan and its monthly mortgage insurance premiums.

By refinancing your existing loan, the total finance charges may be higher over the life of the loan.  Lower rates typically have higher closing costs in the form of discounts points

SHOULD I GET A FIXED RATE OR ADJUSTABLE RATE LOAN?

The biggest difference between ARM and fixed-rate mortgages is how interest works. Fixed-rate loans have interest rates that never change. ARM rates reset at specific intervals over the full loan term. Adjustable-rate mortgages can be a powerful tool for home buyers with shorter-term goals in mind, but they do have their risks.