There’s a huge misconception in the world of real estate that buyers need to pay 20-percent down when buying a home. In fact, it’s often one of the things that holds people back from starting the home buying process. However, it’s simply not true.
You do not need to pay a 20-percent down payment to buy a home in Oklahoma, in 2024.
What do you need? Well, that depends on the type of loan you are getting. Ultimately, a lender or mortgage company will help you figure that out. But there are many options out there.
0% Loans
There are a few programs that offer ZERO PERCENT home loans to qualifying candidates. One of those is a VA, or Veterans Affairs, loan. A VA loan is a mortgage loan guaranteed by the United State Department of Veterans Affairs. These loans are typically available to servicemembers, veterans and their surviving spouses.
USDA loans, also known as the USDA Rural Development Guaranteed Housing Loan Program, often offer zero-percent homes loans. These loans may require that you live in certain locations and that you meet certain eligibility requirements. Your lender would help you figure out if you might qualify for this type of loan.
Help For Home Buyers
If you don’t qualify for a VA or USDA loan, there are many other options.
If you are a schoolteacher, a firefighter, a nurse, or in various other groups, you may qualify for special grants available to first time home buyers. Those grants can help with your down payment of other expenses that come with buying a home. It’s important to talk with a lender about what options may be available.
Taking the first step toward home ownership can change the trajectory of your family.
“When you own a home, you are building that wealth for yourself, but also for your family members,” said Becky Seda, lead agent at Seda Real Estate Group.
“If you are the first person in your family to own a home that will change the future for your children and your grandchildren just based on being able to invest in yourself instead of helping someone else build their investment portfolio.”
The Most Common Loans
In Oklahoma, the most common loans for first time home buyers require a down payment of 3.5-percent.
So, the basic answer to the question of how much do I need for a down payment, in Oklahoma, is a minimum of 3.5-percent.
It’s important to note that putting more than 3.5-percent down can help you in a number of ways. If you can put 20-percent or more into your down payment then you will avoid having to pay PMI, or private mortgage insurance, on your home. PMI is a special type of insurance that a lender requires on conventional loans with a down payment below 20-percent. It is a protection for them — not you— should something happen, and you were to stop making your loan payments.
However, don’t let PMI be what keeps you from buying a home. At Seda Real Estate, very few of our buyers, especially first-time home buyers, have that much set aside to put into a down payment on a home.
“My advice to you is to find out what down payment you can afford and figure out what loan type will be most beneficial to you and get your foot in the door to home ownership,” said Seda.
For many buyers, the way to build up to a higher down payment is to simply purchase that first home, making a lower down payment. As they live in the home the equity they have grows. Then, when they are ready, they can sell that home and use that equity to make a larger down payment on their next home.
“Planning for your future and building that personal wealth that will go towards future down payments starts with buying that first house,” said Seda.
If you have questions about the home buying process our team would love to talk to you. Give us a call at 405-400-9973 or email us at contact@sedarealestategroup.com.
If you want to start the process of finding out what loan type you qualify for we can connect you with a local loan officer who will walk you through that process.