Moving Family Forward

Low Down Payment Purchase Options in Alabama

When you are searching for low down payment purchase options in Alabama, contact Weber Mortgage. We have been in business since 1999 and have earned quite a respected place among our clients. Our experts offer superior rates and services for VA, FHA, conventional, non-qualifying, and other types of home loans. From the first contact to final closing, your biggest investment is our priority. We make your home loan process clear and straightforward.

Cost of a Lower Down Payment

Cost of a Lower Down Payment

Low or no down payment programs have two primary costs:

  • Higher interest rates
  • Higher mortgage insurance premiums

The downside of a low down payment is that, whether you are using a conforming loan or a non-conforming program, you will need to pay higher interest rates and mortgage insurance.

Mortgage insurance can be removed once sufficient equity is produced. So if the property shows at least 20% equity in a few years, the mortgage insurance can be refinanced away.

A related burden of lower down payments is obviously higher loan amounts, which translates into higher monthly payments.

Benefits of Lower Down Payments

The chief benefits of a lower down payment include the following:

  • Increased liquidity.
  • Higher rate of return. Your property’s appreciation will be the same whether you put 3%, 5%, or 20% down payment. In fact, your rate of return actually decreases as you make a larger down payment, as discussed below.
  • Opportunity cost. In some cases, the smart investor can make more money from available cash by placing it in other investments

Though the disadvantages of low down payments seem serious, there are also advantages. Take time to weigh the two and assess which is the best for you.

Determining Your Down Payment

Determining Your Down Payment

The amount needed for a down payment depends on the type of loan and how much the house costs, but the more you can put towards a down payment, the lower your monthly payment can be, and the more you'll save on interest. Conventional loans typically require a down payment of at least 5% of a home's price. FHA loans require as little as 3.5%.

Along with your down payment, you'll have to pay closing costs, or fees associated with processing and securing your loan. These can vary depending on the price of the house and the type of mortgage, but estimate between 2% and 5% of the home's value. Also, make sure to compare between VA, FHA, conventional, non-qualifying, and other types of home loans available.

Why Choose Weber Mortgage?

It’s human nature to build a family and every family dreams to have its very own home. Therefore, it’s only natural that professionals with a family-oriented perspective will realize the true passion for every person seeking a home loan. Weber Mortgage is a family-owned company and we know just how important it is for you to find the most suitable home and loan that meets your desire and takes care of your financial status. Contact us today or call us at 205-751-8583 to take the first step in making your dream to own home come true. Our services are available in Alabaster, Brewton, Campbell, Dora, Eva, and other areas throughout the Alabama state.