The Key to Saving on Your Down Payment

In this segment of our Keystone Keys to Savings blog series, we'll unravel the secrets to saving significantly on your down payment, a critical step in making homeownership more accessible and affordable.

Explore 0% Down Payment Loan Types:

Discover two loan types that can pave the way for a 0% down payment, namely USDA and VA loans. Understanding these options is the first step towards unlocking substantial savings.This not only reduces upfront costs but also makes homeownership more attainable.

See if you qualify for a USDA loan: What are USDA loans? These are loans backed by the United States Department of Agriculture, designed to support rural homebuyers. In order to qualify for a USDA loan, you typically need to meet income requirements and choose a home in a USDA-eligible rural area.

See if you qualify for a VA loan: What are VA loans? These loans are a benefit for military service members, veterans, and their eligible spouses, guaranteed by the Department of Veterans Affairs. In order to qualify for a VA loan, you must meet specific service criteria. The benefits include no down payment requirement and competitive interest rates.

Leverage Lender Incentives and Programs: Another avenue to explore when aiming to save on your down payment is to shop around for lenders offering attractive incentives and programs. As an example, Colony Bank, one of our approved lenders, is currently running a 1% Heroes down payment program, learn more on our incentives page! This initiative is designed to provide financial support to heroes within our community.

Example 1: No Buy Down:

VA Loan, $300,000 home price, 30 year term, 5.75% interest rate = $1751 monthly payment

Example 2: With $6000 (2 point) Buy Down

VA Loan, $300,000 home price, 30 year term, 4.99% interest rate = $1,609 monthly payment

This is a monthly savings of $142 and a $51,120 savings over the life of the loan! 

Note: The calculation provided above reflects current average interest rates as of 12/1/2023. It is also mportant to acknowledge that these interest rates are subject to change based on factors such as location, credit score, loan amount, down payment, loan type, and terms. As interest rates fluctuate frequently, this is not a financial quote but is intended solely as a self-help tool for personal use. It is not meant to offer investment advice.

Saving on your down payment is a critical aspect of making homeownership more achievable. By understanding the qualifications for USDA and VA loans, which offer a 0% down payment, and leveraging lender incentives like Colony Bank's 1% Heroes down payment program, you can take meaningful steps towards securing your dream home without breaking the bank.

Stay tuned for more insights in our "Keystone Keys to Savings" series to learn more about lowering closing costs so that you can maximize your savings! 

Ready to read more about how to save on your closing costs? Click Here!