As the others have already stated, there are definitely loan vehicles with less than 20 percent down but what Thomas Shepard wrote below is absolutely true. When looking for housing, anything less than 20 percent down will cause your offer to be less favorably than a buyer with a higher down payment and a loan preapproval. Work with your trusted lender to determine the best loan options for you.
You might also consider maximizing your purchase by using a discount Realtor for assistance. A discount Realtor s not less qualified than a full commission agent, but at the end of the transaction, you will be entitled to a rebate or to have your LAN fees covered by the agents commission rebate to you. Good luck!!
Allison James Estates and Homes
50% Commssion Rebate on Qualified Purchases
Fannie Mae and Freddie Mac used to have a 3% down payment program for low to moderate income borrowers, but both of those have been discontinued (Fannie Mae was the last, but it was discontinued the end of last year).
The only remaining low down payment programs for typical borrowers are FHA (3.5% down payment) and state affordable housing programs like MassHousing in Massachusetts (see below).
I would check to see if California has a state affordable housing program as that type of financing will no doubt offer significantly better financing terms than a FHA loan.
I do not recommend FHA any more unless you have to go FHA, as the mortgage insurance is so high 1.75% up front and at least 1.35% a month. And the minimum the MI stays on is 11 years. It stays on for the life of the loan with less than 5% down.
I'm going to take a different approach than some of the responses below. Whether or not you have 3.5% down or 35% down, it helps to know your options and the pros and cons of putting down less than 20% from a financial and budgetary standpoint. Right now it might be a strong sellers market and your offer might be perceived a certain way, but don't let that deter you from figuring out what's best for you.
Markets don't move in a straight line. Today's sellers who laugh your offer off of the table, might be tomorrow's who chase your car down the street in hopes of getting anything in writing.
Let me know if I can help you figure it all out.
There are a lot of Programs that will let you put less than a 20% down payment.
If you can afford at least a 10% downpayment, you could get a 90% financing with NO MORTGAGE INSURANCE.
Feel free to contact me for more details
If you are buying in Silicon Valley, the market is very competitive. Many sales are all cash, so if you come to the table with less than 20%, you will often lose to the competition. Multiple offers are the norm. That means you have to decide on a strategy, be proactive and have perseverance. One of your first steps is to get pre approved by a lender.
Keller Williams Realty Palo Alto
I can recommend one for you.
All the best to you.