Understanding Down Payments
A down payment is typically expressed as a percentage of the total purchase price of the home. It varies depending on various factors, including the type of loan you choose, your financial situation, and the property’s location.
Average Down Payment Requirements
Buyers & Programs
In Wisconsin, you're considered a first-time homebuyer if you've never owned a home or if you haven't owned a home in the past three years. According to the U.S. Department of Housing and Urban Development (HUD), you also qualify as a first-time homebuyer if you are a single parent who has only owned a home with a partner while married or a displaced homemaker who has only owned a home with a spouse.
AbbyBank offers assistance with the Down Payment Plus® Program, which provides up to $10,000 to eligible homebuyers for down payment and closing costs. To qualify, you must meet income eligibility requirements, contribute at least $1,000 to your home purchase, complete pre-purchase homebuyer education and counseling, and use the home as your primary residence.
Loan Types and Down Payments
Different mortgage loans have varying down payment requirements:
- Conventional Loans: Typically require a minimum of 3% to 20%.
- USDA Loans: No down payment required in eligible rural areas if household income meets certain guidelines.
- The Freddie Mac Home Possible®: As low as 3% down payment if household income meets certain guidelines.
Saving for a Down Payment
Saving for a down payment can seem daunting, but with the right strategy, it’s achievable. Consider setting up a dedicated savings account, cutting back on non-essential expenses, and exploring down payment assistance programs. Get started by checking out this guide to homebuying: Home Buying 101.
Your down payment is a significant part of the home-buying process. It’s essential to understand the requirements and plan accordingly to ensure a smooth transaction and comfortable mortgage payments. Learn more about AbbyBank’s mortgage offerings on our website and contact one of our friendly mortgage lenders to start the process of buying your first or next home.
