Generally speaking, you’ll be required to make a down payment as a condition of purchasing a home in Louisiana or any other state. Coming up with the money to make this payment is likely the biggest hurdle that you’ll face during the home buying process. However, meeting a down payment requirement may not be as difficult as you have been led to believe.
You don’t necessarily need 20% down
It is in your best interest to put as much money down as possible when buying a residential property. By making a down payment of 20% or greater, you won’t have to pay mortgage insurance. However, it may be possible to obtain FHA or VA loan approval with an upfront payment as low as 3.5% of the home’s purchase price.
Assistance programs are available
You may have been told that down payment assistance programs are reserved for those who are buying their first homes. However, lenders may offer assistance based on your income and the purchase price of the home that you want to buy. Furthermore, if you haven’t owned a home in the last three years, you are technically a first-time buyer.
There are other costs to consider
In addition to a down payment, buyers will need to pay inspection fees and other closing costs that equal about 1% to 2% of the home’s purchase price. You may ask that the seller pay some or all closing costs on your behalf. Your lender may also require you to maintain sufficient cash reserves until the deal closes. The reserves should be enough to make your down payment and pay closing costs with enough remaining to make several future mortgage payments.
If you are in the market for a residential property, it may be a good idea to hire a real estate law professional to help you close on a home purchase. An attorney may be able to review the terms of a purchase agreement or answer any questions that you have about buying real estate.