Low Down Payment Options for First-Time Homebuyers
Buying your first home doesn’t have to mean draining your savings. Today, there are many low-down payment options available — perfect for buyers who don’t have tens of thousands of dollars set aside. However, it’s important to understand how a lower down payment can impact your mortgage in the long term.
Why the Down Payment Matters
Many first-time buyers overlook how the down payment affects more than just the upfront cost. It can create a ripple effect that influences your mortgage interest rate, loan terms, and monthly payments over the life of your loan — which can last up to 30 years.
Higher Down Payment = Lower Cost (Usually)
In most cases, the higher your down payment, the lower your interest rate and the less you’ll pay overtime. The industry benchmark is 20% of the home’s purchase price, which typically allows buyers to avoid private mortgage insurance (PMI).
What If You Put Down Less Than 20%?
If your down payment is below 20%, lenders usually require mortgage insurance, which adds to your monthly payment. However, not all loans with less than 20% down require PMI. Depending on your financial situation and the programs you qualify for, you may still find options with no mortgage insurance or reduced premiums.
Get Expert Guidance
Choosing the right loan and understanding how your down payment affects your long-term financial picture is crucial. At CapLend, we work with first-time homebuyers every day — helping you navigate your options, maximize your affordability, and move into your new home with confidence.
Let’s talk about your down payment options Contact CapLend today.
CLOSING COST
Understanding Closing Costs: Recurring vs. Non-Recurring
When purchasing a home, it’s important to understand the two main types of closing costs: recurring and non-recurring.
Recurring closing costs are expenses you’ll continue to pay as a homeowner. These include:
- Homeowner’s Insurance: Rates can vary widely depending on location. Urban properties often carry higher premiums due to increased risk of crime and the potential for fire to spread between buildings.
- Property Taxes: These are influenced by local government budgets and policies. Depending on where you live, property taxes can fluctuate significantly from year to year.
Non-recurring closing costs are one-time fees associated with the transaction itself. These typically include:
- Transfer Taxes (Split between seller and buyer 1% each in PA)
- Credit Report Fees
- Recorder’s Fees
- Notary Fees
- Title Insurance: This protects you from future claims against the property and is typically arranged through a title company or real estate attorney.
Ready to Stop Renting and Start Owning?
Buying your first home can feel overwhelming — but you don’t have to do it alone. At CapLend Mortgage INC., we specialize in first-time homebuyer loans and are here to guide you through every step of the mortgage process.
LOAN PRODUCT
Buying your first home? Understanding your mortgage options is an essential first step — and at CapLend, we’re here to make it simple.
Here are some of the most common first-time homebuyer loan programs to consider:
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Conventional Loan
Requires a 5% to 20% down payment depending on credit, income, and property type. These loans often offer competitive interest rates and no mortgage insurance if you put 20% down.
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FHA Mortgages
Backed by the Federal Housing Administration, FHA loans are designed for buyers with lower credit scores and allow for as little as 3.5% down.
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USDA Mortgages
If you’re buying in an eligible rural or suburban area, a USDA loan offers 100% financing — that’s no down payment required for qualified borrowers.
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3% Down HomeReady® Mortgage
A Fannie Mae-backed loan designed for low- to moderate-income buyers, this program allows for a 3% down payment and offers flexible qualification requirements.
Let’s Find the Right Loan for You
Whether you’re looking for no down payment, low down payment, or renovation-friendly options, one of our experienced loan originators at CapLend will walk you through every step of the process.