Do You Really Need 20% Down To Buy A House In Las Vegas?
Once you know the facts, you may be surprised how close you are to owning!
Everyone has heard the rule: you need at least a 20 percent down payment to buy a house. Anything less, and you won’t be approved for a mortgage. This idea has kept many Las Vegas residents from pursuing homeownership. But is this the standard or a myth? Do you really need 20 percent down to buy a house in Las Vegas? Or, are there other ways to qualify for homeownership? At Touchstone Living, you’ll find that you have much more flexibility, and “20 percent” isn’t a magic number after all.
First, what is a down payment, and why do I need one?
Most people have to get a loan to buy a house. However, the down payment is the portion of a house’s cost that you pay out of pocket, up front.
Lenders require a down payment to reduce their risk. Putting money down shows you intend to buy and keep the house while paying back the loan. If you ever stop making loan payments, and your lender takes ownership, they keep your down payment to help cover the costs of selling the house to someone else.
Down payments are calculated as a percentage of a home’s total price. The more you pay up front, the less money you need to borrow and thus pay back. A higher down payment may also give you better loan terms. However, Touchstone Living is here to assure you that, despite what some people say, even a small down payment is enough to buy a brand new house in Las Vegas.
Do you need 20 percent down to buy a house in Las Vegas? No!
You want to buy a house, but you’ve always heard that you need a 20 percent down payment to secure a mortgage. That can be a lot of money to save in today’s economy. Lucky for you, this simply isn’t true. A 20 percent down payment is rarely a requirement for homebuying.
So where does this idea come from? In the past, borrowers were advised to have a 20 percent down payment to avoid private mortgage insurance (PMI). If you pay less than 20 percent up front, a lender may require you to get PMI to protect them from defaults on house payments. There may still be conventional loans that require 20 percent down, but these are far from the rule. Now, many homeowners find it’s easier and just as affordable to make a smaller down payment and pay for PMI if it finally gets them into a home and out of a rental.
Some people also believe that a lower down payment leads to a higher interest rate. This also isn’t true. Your lender considers several factors before offering you an interest rate. Your down payment is just one piece of the puzzle. At Touchstone Living, we take a big-picture view of your finances and work with you to determine which loan will meet your needs.
Payment
Income Ratio
Score
History
So, how big of a down payment do I actually need? Touchstone can help
There’s nothing wrong with a 20 percent down payment. However, large down payments simply aren’t realistic for most Las Vegas homebuyers. After all, if you’ve spent several years renting, much of your money has gone into a landlord’s pocket rather than into your savings account.
Say you’re looking at a $400,000 home. A 20 percent down payment would be $80,000. That’s a lot of cash! However, a smaller down payment, such as 10 percent, or $40,000, is much more realistic for a renter. That lower down payment will help you buy a home sooner and keep more money in your pocket.
Down Payment on a $400,000 Home
15%
10%
5%
It’s a huge relief when you look at those numbers and realize homeownership is much more attainable than you realized. Touchstone Living offers many ways to help first-time home buyers afford a home. From as little as 0% down to flexible financing options, we prove that homeownership in Las Vegas is possible!
But don’t mortgage loans have down payment requirements?
Different types of loans do have rules for down payments. However, their requirements are well below 20 percent. As we said before, your loan terms will depend on several factors. You should never assume you can’t afford a home based on one number.
Look at how little money you need to secure these popular types of loans. If you’ve always thought the magic number was 20%, you’ll be happy to see that you can actually qualify for a home loan with much less.
| Loan Type | Starting Required % Down |
|---|---|
| FHA Loan | 3.5% |
| VA Loan | 0% |
| Conventional Loan | 5% |
Not sure what loan is best for you? Call Touchstone Living to discuss your options and get pre-qualified. We offer competitive rates for first-time home buyers to make homeownership as affordable as possible. Together, we’ll find the right loan option for you.
A lower down payment isn’t the only way to make homebuying more affordable
A lower down payment is just the start of making homeownership more affordable. If you’re still not sure the math is working in your favor, the first step should be a call to Touchstone Living. Our friendly neighborhood experts are always available to help you understand how you can afford a new home in Las Vegas. Call today, and we’ll discuss how we make homeownership possible with:
- Low interest rates
- State assistance programs
- $0 closing costs
- Move-in ready homes
The math doesn’t lie. Touchstone Living makes homeownership affordable in Las Vegas
Don’t miss out on buying a house based on outdated information. Homeownership is closer than you think! A conversation with the experts at Touchstone will prove that you can afford a new house in Las Vegas. Call our knowledgeable neighborhood experts to get pre-qualified and schedule a tour at one of our beautiful planned communities. We can’t wait to hand you the keys to your new home.
