Low Down Payment Home Loans | Brothers Financial

FHA Loan

You can purchase a single-family home or condominium with as little as 3.5% down payment using an FHA loan, but there is a price for lower down payments on conforming loans: mortgage insurance (often called PMI, private mortgage insurance).

Mortgage insurance is required when the conforming loan amount is MORE than 80% of the purchase price (practical translation: down payment is less than 20%). Also, the lower the down payment, the higher the premium ratio charged.

USDA Loan

Is your dream home surrounded by pasture and farmland? Buyers in rural and suburban markets may be able to use a USDA loan, which requires no money down.

Household income limitations do apply and buyers should expect to pay PMI if their down payment is less than 20%.

VA Loan

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

There are also non-conforming mortgage loan programs available that allow for 80/20 set-ups, which allow borrowers to obtain a second mortgage to cover the 20% down payment.

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

There are costs and benefits to any option, including those with low down payments. You should carefully consider your options and discuss your plan with a professional.

Talk to one of our loan specialists today to come up with a customized solution that best fits your needs and budget.

Low or no down payment programs have two primary costs that result in a higher monthly payment:

Higher interest rates
Higher mortgage insurance premiums.

Mortgage insurance can be removed once sufficient equity is produced. For example, if the property shows at least 20% equity in a few years, the mortgage insurance can be refinanced away.

Though the disadvantages of low down payments seem serious, there are also advantages. Take time to weigh the two and assess which is the best for you.

The chief benefits of lower down payment include the following:

Less money out of pocket at the time of purchase.
Higher rate of return. Your property’s appreciation will be the same whether you put 3%, 5%, or 20% down. In fact, your rate of return actually decreases as you make a larger down payment, as discussed below.
Opportunity cost. In some cases, the smart investor can make more money from available cash by placing it in other investments.

During the first few years of the mortgage loan, the bulk of your monthly payments go towards paying interest – which is usually tax-deductible. So you get quite a bit of your monthly payments back at the end of the year in the form of tax deductions.

Carefully consider the amount of money that you want to put down. Your lender will qualify you for a certain level based on your income; however, that amount may be different from the level that you feel comfortable paying each month. You must decide what you can afford.

Talk to your loan officer at Brothers Financial about the best situation for you.

REVIEWS

Customer Feedback

Brothers Financial would like to thank you for choosing us to take care of your mortgage needs. We understand the mortgage process can be very challenging, but our goal is to make it as easy as possible for you.

    
 
 
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   Rachel Eagleton 
 
 
 
 Trustindex verifies that the original source of the review is Google. Brian helped me get funding when I had been turned down by multiple other lenders due to being self-employed. The entire process was seamless and I am so grateful for his help. Thanks to him I get to make necessary repairs to my home and stay in it for years to come.
  
 
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   Aidan Tree 
 
 
 
 Trustindex verifies that the original source of the review is Google. Brody and Brian helped us so much in our home purchase every step of the way and made the process seamless and quick, and a at great rate!
  
 
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   Daphne Herrera 
 
 
 
 Trustindex verifies that the original source of the review is Google. Great experience! We’ve worked with Brian for about 7 years now. We live in Colorado and when Brian advised he was moving to TN, we were bummed. Thankfully, that doesn’t prevent us from doing business! This process was fairly streamline and fairly painless. Brian made sure to update us along the way and advise if there were additional documents needed. I definitely recommend using Brother’s Financial!!
  
 
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   Mary-Grace Griffin 
 
 
 
 Trustindex verifies that the original source of the review is Google. I highly recommend Brian Reid. He helped so much with the home buying experience. He was always willing to to answer questions and guide us through the process.
  
 
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   Ann Kömel 
 
 
 
 Trustindex verifies that the original source of the review is Google. Working with Brian made our home buying process much less stressful! His knowledge and expertise got us more favorable loan terms and interest rate. He was great to communicate with and very responsive as things change quickly. Can't recommend him enough!
  
 
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   Ayoka Moss 
 
 
 
 Trustindex verifies that the original source of the review is Google. Great time working with Brian on 4 refinances congruently!
  
 
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   Tammy Souther 
 
 
 
 Trustindex verifies that the original source of the review is Google. Brian and his team are fantastic! Highly recommend them for you home loan needs. Communicated well and made our process a breeze!
  
 
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   Nick Souther 
 
 
 
 Trustindex verifies that the original source of the review is Google. Amazing. Brian was amazing throughout the entire process. Very transparent, and involved with you as a client. He made a stressful experience ao much easier
  
 
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   Ginny Newman 
 
 
 
 Trustindex verifies that the original source of the review is Google. Brian was great to work with. He responded quickly and answered all our questions to help us understand and feel comfortable with the process.