If you’re like most people looking for a home for sale in Lake City, you know you’ll have to come up with a down payment – but how much money will you need? Is it possible to buy a house with nothing down? Here’s what you need to know.
How Much Money Do You Need for a Down Payment on a House in Lake City?
Standard real estate wisdom says that you need to come up with 20 percent of a home’s purchase price as a down payment. That money comes right out of your pocket – it’s not borrowed from a lender. That means you only borrow 80 percent of the home’s purchase price from your lender.
But is 20 percent really necessary?
The 20 Percent Down Payment Myth
You don’t have to come up with 20 percent of a home’s purchase price to buy, but generally speaking, that’s the best course of action (except putting down more than 20 percent). That’s because if you put down 20 percent, your monthly payments will be lower, you won’t have to pay for private mortgage insurance and you’ll most likely qualify for more favorable rates and terms.
None of that changes the fact that 20 percent of $300,000 is $60,000, though – and that’s a substantial amount of money for most people.
What Loans Let You Put Down Less Than 20 Percent?
Many loans are available for people who don’t want to put down 20 percent (including VA loans and USDA loans). Unless you’re borrowing with a government-backed guarantee, though, you’ll have to pay for private mortgage insurance. And in every case, the less you put down, the more you have to borrow from your lender.
Are You Buying a Home or Land for Sale in Lake City?
If you’re moving to Lake City, we can help you find the perfect place to live. Call us at 386-243-0124 to tell us what you want from your home and we will begin searching right away.
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