Down Payment

Down payment may or may not be required depending on whether you fit a first-time homebuyer program, receive a gift, qualify for down payment assistance, buy in a USDA eligible neighborhood or receive VA benefits.

If none of the above is true for you, then the following standard down payment requirements by mortgage loan programs would be required:

FHA 3.5% of purchase price

Conventional first-time homebuyer 3%

Conventional non-first-time homebuyer 5%

V A 0%

USDA 0%

Alternative Non-QM 10-20% but some may go to 5% down with a simultaneous second mortgage

The following sources are acceptable down payment options for all loan

programs:

• Gift from family, church, employer

• Personally owned funds in checking, savings, investment accounts

  • Seasoned for 2 months (balance calculated by averaging 2 months)

• 401k or retirement accounts

• Down payment assistance programs

• State and Community

• Church

• Mortgage company provided

• Personal loans (if payment fits within debt-to-income ratio)

• Simultaneous second mortgages (if fit with debt ratio)

Down Payment Assistance

A quick Google search for your local state, city, community DPA programs would be a good place to start (my mortgage company may be helpful as well - contact me for info).

To check a property eligibility for a no-down USDA loan go to:

https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.dopageAction=sfhprev

Down Payment Savings Plan

If none of the above options work for you and a down payment must be saved from personal funds or wages, please use the following worksheet to figure your down payment and plan to execute:

Purchase price $________________

Down payment required $______________

Current amount saved $_______________

My current net cashflow (after all bills) $____________

Monthly savings target $_______________

Total down payment saved by ___/___/_____

My target purchase date ___/___/_____

Completed your plan may look like this:

Purchase price $ 345,000

Down payment required $10,350 (3%)

Current amount saved $1,756.20

My current net cashflow (after all bills and expenses) $723

Monthly savings target $625

Total down payment saved by 04/17/2025 or 13.75 months

My target purchase date 05/01/2025

I would recommend that you place your savings in a high-yield savings account at today’s rate of 4.25% or more.

If you did, the above plan example would net you an additional $20.96 per month in savings or total additional funds of $293.43.

Every dollar counts!

For example, with a starting balance of $1,756.20 and a monthly deposit of

$625 at a 4.25% annual interest rate, it would take 14 months to reach the target of $10,350. During this time, the account would generate approximately $293.43 in interest, bringing the final balance to around $10,799.63.

Here are five banks currently offering high-yield savings accounts with an annual percentage yield (APY) of 4% or more. Each provides an online application option for easy access:

1. Bask Bank - Offers a high-yield savings account with a 4.85%

APY , requiring no minimum balance. Learn more and apply here.

2. Bread Savings - Bread Savings offers 4.75% APY on their high-

yield savings accounts with a $100 minimum balancerequirement. Learn more and apply here.

3. CIT Bank - With a high-yield savings rate of 4.70% APY , CIT

Bank requires a $5,000 minimum balance. Learn more and apply

here.

4. UFB Direct - Their high-yield savings account offers 4.57%

APY with no minimum balance requirement. Learn more and

apply here.

5. PNC Bank - PNC provides a high-yield savings account with a

4.15% APY , without requiring a large minimum balance. Learn

more and apply here.

High-yield accounts are a smart choice to maximize returns on your savings, especially when rates are competitive, like those above.

[source: NerdWallet: Finance smarter]

We can all get better at saving, it’s hard but the discipline to do so prepares us to maintain our home investment and begin making other wise investments if we stay on the right path of homeownership.