How to Purchase a Home with a Low Down Payment

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After getting married and having children, buying a home was one of the biggest decisions in my life.

My husband and I were married, living in an apartment with our first child on the way. We wanted a place of our own, a place to raise our children and a place that we could make improvements that reflected our style. It was time to make the decision of becoming a home owner and purchase a house without a lot of money.

Keep reading to see how we were able to purchase a home a low down payment.

I have partnered with Genworth Financial to share my experience of becoming a first time home buyer.

foreclosure realtor sign

First things first, we met with a mortgage broker who happened to also be a family friend. She helped us to understand our finances and we went through tons of paperwork to find out what we could afford. The entire experience was a learning process, as first time homebuyers, my husband and I had no clue what to expect.

I knew there needed to be a down payment of some sorts and had heard a number of 20% of the purchase cost. While we had a lot saved for our first home, it wasn’t near the 20% amount that they wanted.

We decided to go house seeing with our realtor to see what was out there in the housing market. I think we visited maybe 5 houses in the first day, the first one being a foreclosure. The house was so beautiful, sadly- the people who lived there didn’t take very good care of it and the foundation needed serious repairs. I vaguely remember the second two houses, but the last house was a show stopper. We were in LOVE!

So we had a house picked out and decided to sit back down at the table with our mortgage broker, it was time to figure out our options.

With the purchase of Mortgage insurance, a house can be purchased with less than the expected 20% down. When one purchases mortgage insurance, instead of applying the 20% down, it gives the lenders financial protection should you default on your loan. There are a lot of great benefits of purchasing mortgage insurance, like the ones listed here at Genworth Financial.

While we had a decent amount of money saved for the purchase of our house, we decided to go with a smaller down payment, purchased the mortgage insurance and used some of our down payment to make improvements in the home that we were purchasing.

There are a lot of things to consider when purchasing a home for the first time, we were thankful that mortgage insurance allowed us to become home owners without the stress of having a ton of money to put down.

I recently came across this article about how to make your retirement cheaper. It’s a great article because it reminds me that budgeting your money doesn’t just start with your house purchase, it is a life long lesson and these tips will help us move forward with the next step in life.

Did you consider mortgage insurance with the purchase of your first home?

 

*This post was brought to you by our friends at Genworth Financial

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32 thoughts on “How to Purchase a Home with a Low Down Payment

  • May 8, 2013 at 7:48 pm
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    i didnt even know it existed when we bought our first home! Reply
  • May 8, 2013 at 6:23 pm
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    Great advice and true, I'm already a homeowner and I wish I would of had this information. Reply
  • May 8, 2013 at 3:16 pm
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    This is some great info! I hope to buy a home soon. Reply
  • May 7, 2013 at 7:47 pm
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    Yes, we got mortgage insurance when we bought our house. Reply
  • May 7, 2013 at 10:43 am
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    Great information! We originally purchased a home on land contract and we purchased insurance on our own. It became to hard to keep up both payments with raising a family and upkeep costs. Now it is rolled all into one as well as our property taxes. It makes it much easier. Thanks for sharing. Reply
  • May 7, 2013 at 8:43 am
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    This post was really helpful so thank you! My fiance and I live in an apartment right now but have been toying around with the idea of getting a house. Finances are our set back. Reply
  • May 5, 2013 at 8:29 pm
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    sadly we can't afford a home to buy but I would consider the insurance if we did Reply
  • May 4, 2013 at 9:15 am
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    That is a good idea to put down less and buy the mortgage insurance. That way you also have money to fix up what you want in your new house. Great post! Reply
  • May 3, 2013 at 9:40 pm
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    buying a house has always been a huge financial step. Sadly too many do not educate themselves. Everyone should pursue more than one source Reply
  • May 3, 2013 at 10:34 am
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    This is good information. My son and DIL are actually looking at home this week! They are looking at no down payment. They will have insurance. They only plan to stay in the home for about 4-5 years and expect to move again before settling. It seems that everyone's situations are a bit different, and it helps to have people in the know to offer some guidance on something as big as a home purchase. Reply
  • May 3, 2013 at 10:32 am
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    Thank you. I know like most people, we're worried we won't have enough down. Reply
  • May 3, 2013 at 10:29 am
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    I will hopefully be finding a place of my own soon, so this article will help! Reply
  • May 2, 2013 at 3:12 pm
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    We'll be first time home-buyers so I made sure to 'favorite' this article :) Thanks for the help!! Reply
  • May 2, 2013 at 2:07 pm
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    Great article, we are looking at buying at the end of this year and using my husband's va benefits Reply
  • May 2, 2013 at 10:54 am
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    Thanks so much-we are considering buying our first home and this article was a big help! Reply
  • May 2, 2013 at 5:27 am
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    I will keep this in mind if I am ever able to finally buy a home. Reply
  • May 1, 2013 at 7:53 pm
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    thank you! been looking to buy a new house! Reply
  • May 1, 2013 at 3:30 pm
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    This is a great post, I'm going to get more info, my oldest is looking to buy his first home and this post helped alot for me to share it with them. Thank you Reply
  • May 1, 2013 at 12:34 pm
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    Very useful information. Thanks! Reply
  • May 1, 2013 at 10:25 am
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    We just recently sold our house and bought a new home a few years ago. The home buying/selling process is definitely not a fun one! Reply
  • May 1, 2013 at 7:30 am
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    The mortgage insurance sounds good. Thanks for sharing! Reply
  • April 30, 2013 at 8:40 pm
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    This is great. We bought a mobile home about a year ago. Someday I want a real house though. Reply
  • April 30, 2013 at 10:44 am
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    Thank you for this! We are looking at buying a house in the next few months :) Reply
  • April 30, 2013 at 10:30 am
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    Thanks for sharing this. We were able to purchase our home with a low down payment as well. I thank God every day. It took us forever to find a house where we weren't outbid because the market was really low then (5 years ago). Reply
    • April 30, 2013 at 2:49 pm
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      That's great! We purchased around that time too, glad you were able to find a home you love. Reply
  • April 30, 2013 at 9:29 am
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    We purchased homes in the past with a low downpayment. It was great that there were programs to help us become homeowners. Reply
    • April 30, 2013 at 2:50 pm
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      I agree! Love that there are programs to help everyone achieve their dreams of owning a home. Reply
  • April 30, 2013 at 9:29 am
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    Ah, the home buying process. I'm glad I'm pretty far removed from that at this point, but, I know I'll be going through it again eventually! Great information for anyone in this phase. Reply
    • April 30, 2013 at 2:51 pm
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      Thanks for commenting Crissy! I still remember the stress of dealing with the home buying process, that was 4 years ago. I hope to not deal with it again, though I'm sure some day we will. Reply

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