What’s the Minimum Down Payment for a House?

Perhaps the most challenging part of qualifying for a mortgage is making the minimum down payment. If you’re struggling to save, you’re not alone. Fortunately, our Rent to Home Solution is an innovative program that helps homebuyers with smaller down payments afford their home and move in today—not years down the road.

What is a Down Payment?

A down payment is a lump sum of money that you pay upfront when applying for a mortgage. Most lenders require a minimum down payment based on a portion of the purchase price of your new home.

Lenders require down payments to reduce their risk, as it demonstrates that you’re committed to purchasing the home and it reduces the size of your loan.

How Much Do I Need to Save?

Assuming your home is $500,000 or less, most lenders require a minimum down payment of 5% of your home’s purchase price to approve your mortgage application. If your home is between $500,000 and $999,999, you’ll need 5% on the first $500,000, and 10% on the remaining balance.

Depending on how much your home costs, the size of your down payment can vary dramatically, and it can be hard to save money when you’re also responsible for paying rent in another home.

What Are the Benefits of a Smaller Down Payment?

There are benefits and disadvantages to both a smaller and a larger down payment. A larger down payment means that you may be significantly cutting into your savings for emergencies, However, your monthly payments will be much lower.

With a smaller down payment, you can buy and live in your home sooner, and reserve more funds for savings, including for any renovations your home may need. With our Rent to Home Solution, you can work toward purchasing your home for as little as 3% down.

How Our Rent to Home Solution Can Help You Achieve Homeownership

Becoming a homeowner doesn’t have to be an impossible dream. Our Rent to Home Solution allows you to rent your prospective home from us while you save for a down payment to qualify for a traditional mortgage at the end of a set term (usually 3 years).

We can connect you with qualified realtors who will help you find your perfect home within your budget. Once you’ve found it, we purchase the home, and you move in immediately. Simple!

During your term, you’ll be set up on a payment plan: rent, which includes the mortgage, property taxes, property insurance; and a savings credit, which will help you build your down payment. We’ll also pair you with a certified financial advisor who will help you create a budget and improve your credit score.

At the end of your term, you’ll be ready to purchase your home! We’ll match you with a trusted mortgage broker to ensure that you qualify for the mortgage you want. Congratulations on becoming a homeowner!

Build Your Savings and Become a Homeowner with JAAG Properties

Achieve your dreams of homeownership sooner with our Rent to Home Solution! With expert advice and professional guidance every step of the way, we set you up for success on your home-buying journey. Apply online today or contact us for more information!