A $10,000 down payment can be a more than sufficient down payment for a home purchase depending on a variety of aspects regarding the home purchase and the borrower’s qualifications.  The amount of the down payment needed to buy a home for any individual mortgage borrower will depend on factors such as the income and credit of the borrower as well as the  . 

In the current mortgage market, the minimum down payment required for a conventional loan is 5%.  However, the USDA rural development loan program allows for 100% financing or no money down as does the VA mortgage loan programs.  Both of these mortgage programs have strict qualification standards, borrowers have to meet certain requirements that restrict who may qualify for one of these home loans.  VA loans are available for veterans and USDA loans are available in qualified rural areas for borrowers that meet the income restrictions placed on the program. 

One of the most widely used loan programs that have the least restrictive qualification standards for low down payment mortgage loans is the FHA mortgage programs.  The minimum down payment required for an FHA insured mortgage loan is 3.5%.  FHA loans require borrowers qualify under the income and credit requirements but are there are no limitations on geography or household income.  FHA loans are made in all 50 states and used by first time home buyers as well as by those that are previous or current home owners buying a new home.

All low and no down payment mortgage programs require that the borrower meet minimum credit, income, and asset requirements.  New homeowners will also need to consider the other costs involved with buying a home and obtaining a home loan.  Other costs include the closing costs for the loan such as the loan origination points and costs, title insurance, tax and insurance escrows and related loan processing and closing charges.  In addition, most all loan programs require that the borrower have sufficient financial reserves on hand after meeting the down payment and closing costs needs.  A rule of thumb for reserves is two months of PITI or the dollar amount for two months of monthly mortgage payments.

The bottom line, $10,000 is more than enough money for a down payment on a new home but you will have to dig deeper into the facts of the transaction and evaluate where the home purchase is located and the purchase price as well as the income, credit, and asset qualifications of the borrower or borrowers.

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