Connect

Connect with us...

Dashboard

Login using...

Answers to the 3 Most Common Down Payment Questions

Posted by Sharon Rosshirt on Thursday, July 6th, 2017 at 12:03pm.

When you are thinking about buying your first home you will inevitably want to know the answers to these very common questions. This is fair, with the vast amount of mortgage options and a constantly shifting set of rules it can be hard to know the right answers. Let's get you up to speed on these three common down payment questions.

1. Do I have to put 20 percent down?

This question is absolutely the most common and for good reason.  The quick answer is that, yes, some mortgage companies do require at least 20% down but there is a dearth of options in Central, TX that require much less.

Private Mortgage Insurance (PMI)

The first option can let you get into your new home for as little as 3%-5% down. If you are ready to buy but haven't saved the $30,000 - $60,000 for a down-payment you can buy a home with a private loan and PMI.  Typically PMI will cost between 0.3% - 1.10% of your total mortgage and will stay in place until you have reached 20% equity on your purchase.  This additional insurance will automatically drop off your monthly mortgage when you reach 22% equity.  This one is a trade off but is the most accessible option for you if a 20% downpayment isn't possible.

New Affordability programs

There are some exciting new programs that are available for anyone looking to purchase a home that can help you buy a home for less than 1% down.  Our partner Kelley Ollendorf of Guild Mortgage shared their new 1% down conventional loan.  If you have outstanding credit (680+) and are making less than the area median income (~55k Household) you might qualify.  To find out for sure if this program would work for you talk to your Stanberry agent.

VA Loans (Military Only)

If you are Active military or a veteran you may qualify for a Veterans Affairs loan. Most members of the military, veterans, reservists and National Guard members are eligible to apply for a VA loan. These mortgages do not always require a down payment and are available to military veterans and active military members. The best news is that VA loans are not subject to PMI like traditional civilian loans.

2. How much should I put down?

So now that you know that you don't necessarily need 20% to start the home buying conversation you might be thinking "How much SHOULD I put down?" While a 20% down payment will ensure that you don't run into additional expenses like PMI it may not be the right choice for you.  If 20% is not going to happen you should consider how much of a monthly payment you are interested in making. In general, for every $1000 you put down you will reduce your monthly mortgage by around $60.

This is also the time to consider if there will be necessary purchases that you will need to make for your new home. This could include lawn care equipment, appliances, or upgrade you plan on making.  For some, a slightly higher monthly payment is worth being able to get a jumpstart on some customization or perks for your new place.

3. Are down payments tax deductible?

Most of the time a cash down payment is unfortunately not tax deductible. Worry not though, when you work with a REALTOR they will be able to give you a good idea of some of the things involved in purchasing your home that is tax deductible.  PMI interest can be claimed along with property taxes at the end of the year.  When it comes to these deductions each house is unique so make sure that you talk with your REALTOR to find all of the information you need.

Search Homes Today

Map
Sort listings by:Price, Highest First
Photo of Listing #5625677

7400 Coldwater Canyon Rd Austin,TX $35,000,000

Residential, House
  • 2 Beds
  • 1 Baths
  • 1,000 SQFT
  • 833 DOM
View details More Photos Save

The Lake Austin Ranch Is A Rare 65.68 Acre Waterfront Property Located Along The Shores Of Lake Austin Near The 360 Bridge. This Iconic Property Features 2600 +/- Ft Of Water Frontage, An 8 Slip Marina And Is Only 6.5 Miles Nw Of Downtown Austin R...

Compass RE Texas, LLC
Photo of Listing #1998395

2401 Portofino Ridge Dr Austin,TX $14,900,000

Residential, House
  • 7 Beds
  • 11 Baths
  • 16.7k SQFT
View details More Photos Save

Located On The Most Private & Prestigious Street In Barton Creek — And Situated 4.04 Acres Overlooking The #6 Green — This Unique Home Is Truly One Of Austin's Finest Residences. Designed By Renowned David Shiflet & Brought To Life By The Unequivo...

Compass RE Texas, LLC

3511 Westlake Dr Austin,TX $14,700,000

Residential, House
  • 4 Beds
  • 6 Baths
  • 6,408 SQFT
  • 150 DOM
View details More Photos Save

For Over 30 Years People Have Boated Past This Iconic Lake Austin Home And Celebrated The Architecture Of "the Nautilus." Unsurpassed, World-class Architecture By Renowned Designers Who Built This As Their Family Residence. Enjoy The Privilege Of ...

Moreland Properties

4314 Tortilla Flt Austin,TX $12,000,000

Residential, House
  • 3 Beds
  • 4 Baths
  • 6,409 SQFT
  • 497 DOM
View details More Photos Save

Rare Opportunity To Live On A 50-acre Ranch Located Inside The Guarded Gates Of A Prestigious Neighborhood. Complete Privacy, Seclusion, And Stunning Hill Country Views. This Is Prime Real Estate. Little Barton Creek Meanders Through The Property...

Compass RE Texas, LLC

4104 Shimmering Cv Austin,TX $11,750,000

Residential, House
  • 5 Beds
  • 7 Baths
  • 7,775 SQFT
  • 144 DOM
View details More Photos Save

Spectacular Waterfront Estate In The Gated Community Of Watersedge. 200' +/- Of Prime Lake Austin Waterfront. Exceptional Attention To Detail Throughout By Artisans From Around The World Create An Authentic Nod To The Spanish Colonial Revival Styl...

KW-Austin Portfolio RealEstate

11211 Musket Rim St Austin,TX $9,900,000

Residential, House
  • 6 Beds
  • 7 Baths
  • 7,341 SQFT
  • 352 DOM
View details More Photos Save

Rare Acreage On Barton Creek. 39.269 Acres On Both Sides Of Barton Creek Offers Ultimate Privacy And Location. Thirty Minutes To Downtown Austin Or The Airport. Custom-built 5 Bedroom Home With Beautiful Covered Outdoor Living Areas That Overlo...

Kuper Sotheby's Itl Rlty

11408 Musket Rim St Austin,TX $9,250,000

Residential, House
  • 7 Beds
  • 9 Baths
  • 12k SQFT
  • 13 DOM
View details More Photos Save

Sprawling French Country Estate On 10+ Acres With Barton Creek Frontage In The Golf Course Community Of Spanish Oaks. Lush, Flat Land With Meticulous Landscaping, & Thoughtful Hardscape Commanding Views Of The Hill Country & Creek, Making It The I...

Compass RE Texas, LLC
Photo of Listing #2461568

13815 Pecan Dr #4 Austin,TX $8,500,000

Residential, House
  • 7 Beds
  • 9 Baths
  • 11.7k SQFT
  • 150 DOM
View details More Photos Save

Nestled On Just Under 5 Acres, Pecan Drive Is An Intimately Situated Family Lake House. Designed By Architect James Larue, With Emphasis On Highest Quality. With An Abundance Of Natural Light, & Views; This Ultra Private Estate Features 6 Bedrooms...

Keller Williams Realty
Photo of Listing #6065273

215 Bella Riva Dr Austin,TX $8,450,000

Residential, House
  • 8 Beds
  • 9 Baths
  • 9,760 SQFT
  • 159 DOM
View details More Photos Save

Situated On A 16-acre Hill-top Peninsula W Over 1200 Ft Of Water Frontage This Breathtaking Estate Was Designed By David Shifflett & Built By Michael Dean Homes. Timeless Style & Grace Emanate Through The Property W Finishings Including Imported T...

Kuper Sotheby's Itl Rlty

N/A Austin,TX $7,995,000

Residential, House
  • 2 Beds
  • 2 Baths
  • 1,783 SQFT
  • 92 DOM
View details More Photos Save

Secluded Property, Located On Lake Austin, Adjacent To Westwood Cc Offers Unparalleled Potential. Gated, The Original 1908 House Sits On A Hilltop W/panoramic Views, Surrounded By Live Oaks On Over 3 Acres. Approx 480 Feet Of Waterfront W/ Two-sli...

Gottesman Residential R.E.
Photo of Listing #2351541

17301 Flintrock Rd Austin,TX $7,994,500

Residential, House
  • 6 Beds
  • 10 Baths
  • 12.2k SQFT
  • 295 DOM
View details More Photos Save

Extraordinary 85 Acre, Gated Estate In The Heart Of Lakeway. Incredible Views From One Of The Highest Hills In The Area. Total Privacy From This Nearly 11,000 Sq Ft Colorado Style Mountain Lodge Plus Approx 2500 Sq Ft Of Outdoor Living Areas. 2bed...

Coldwell Banker United REALTOR

4501 Island Cv Austin,TX $7,595,000

Residential, House
  • 5 Beds
  • 8 Baths
  • 11.8k SQFT
  • 146 DOM
View details More Photos Save

This Magnificent Estate Inspired By The Historic Venetian Villas That Line The Grand Canal Was Exquisitely Built Along Nearly Two Hundred Feet Of Lake Austin Waterfront. The Meticulously Maintained Grounds Sit On A Premium Half-acre In The Prestig...

Kuper Sotheby's Itl Rlty
Photo of Listing #8158109

3811 Westlake Dr Austin,TX $7,500,000

Residential, House
  • 5 Beds
  • 7 Baths
  • 5,775 SQFT
  • 300 DOM
View details More Photos Save

Beautiful Contemporary Home Sitting On 100' Of Lake Austin Waterfront. Main House Features 4 Bed, 4 .5 Bath, Private Office, Large Private Master Suite With Stunning Views. Separate / Detached Guest House Offers 1 Bed, 2 Bath, Kitchen And Large Fa...

Kuper Sotheby's Itl Rlty

12861 Hughes Park Rd Austin,TX $6,800,000

Residential, House
  • 6 Beds
  • 7 Baths
  • 13.1k SQFT
  • 33 DOM
View details More Photos Save

?absolutely Stunning, Private Estate On 5 Exquisitely-landscaped Acres With Panoramic Lake Travis Views From Almost Every Room. Spectacular Resort-style Pool And Outdoor Living & Entertaining Spaces. Amazing Home Movie Theater, 2000+ Bottle Wine R...

Compass RE Texas, LLC

213 Costa Bella Dr Austin,TX $6,750,000

Residential, House
  • 7 Beds
  • 9 Baths
  • 13.6k SQFT
  • 24 DOM
View details More Photos Save

Lake Travis Waterfront W/boat Dock On 3 Acres With Private Gate. Designed By Cornerstone Architects W/ Many Artistic Features That Take Advantage Of Views. Wine Room Holds 1600 Bottles. Gourmet Kitchen W/island, 6 Burner Range, 2 Dishwashers, Brea...

KW-Austin Portfolio RealEstate

Leave a Comment