There’s more than one way to do a down payment, especially if you’re a first-time home buyer navigating the costs, requirements and best practices of the entire home-buying process.
From doing your financial homework, to researching locations and communities, plus timing up moving logistics — perhaps job transfers — it’s a lot! And one of the most fraught tasks is assembling funds for your down payment.
That’s the sum of money you’ll pay during closing that not only takes a chunk out of your impending mortgage, but assures your lender that you’re serious about buying a home and that you’re a good mortgage risk.
Since most of us buy our homes via a mortgage, most of us need a down payment. But there’s more than one way to do it in today’s residential real estate market.
Here’s how to get creative with down-payment options.
Key takeaways
Saving for a down payment can feel overwhelming, but buyers have more options than they may realize, especially first-time homebuyers.
A 20% down payment can help avoid private mortgage insurance, but there are other paths that can still make homeownership possible.
Buyers should explore builder incentives, preferred lender programs, and down payment assistance offered through federal, state, county, and local resources.
With the right mix of planning and available programs, buyers may be able to make a new home purchase happen sooner than expected.
Why down payments matter
The industry standard is 20 percent of of your approved mortgage amount — approximately $60,000 for a $300,000 mortgage, for example.
Hit this mark and you’ll avoid private mortgage insurance, which adds costs to your monthly payment and protects your lender until you achieve 20 percent equity in your new home.
Selling a current home? Use some proceeds for the down payment on your new one. Many first-time buyers don’t have this option, making a 20-percent — or any — down payment more difficult, especially if they have a finite timeframe for work, family or personal circumstances.
Never fear. You have numerous down-payment resources.
We’re here to help!
ICI Homes pros know the home-buying climate and many of us have been through the mortgage process too. Don’t hesitate to ask your ICI Homes sales associate about builder incentives.
These are financial perks on new builds and inventory homes that can help any potential customer save significant money on a home purchase. They include interest-rate buydowns when working through ICI Homes’ preferred lenders, major design savings at the ICI Homes Design Center for new builds, or special pricing on homesites and inventory homes in the master-planned communities we development and those in which we’re preferred builders.
ICI Homes’ builder incentives can vary by location, season or duration, but any or all incentives can bolster buyers’ budgets and, hopefully, their down payments.
Federal options
Definitely see if you qualify for down-payment assistance, lower down payments, or lower-interest mortgages from federal, state and/or local entities.
Start with the U.S. Department of Housing and Urban Development and the U.S. Department of Agriculture. Veterans can query the U.S. Department of Veterans Affairs.
State options
Here, the Florida Housing Finance Corporation — a state legislature-created organization offering multiple home-buyer assistance programs — stocks information at its website.
County and local options
Check the county where you’re targeting a new custom Florida home for possible down-payment assistance from municipalities and county governments. Some local nonprofits and other organizations also offer down-payment and buying assistance.
