Find answers to our Frequently Asked Questions.
Posted January 27, 2021

Buying a home is stressful. There’s a lot to remember and important things to consider, but it can be easier if you educate yourself and stay informed.

A top concern for those considering buying a home is coming up with a down payment. Here are a couple of programs and other things to consider.

Mortgage Insurance

Mortgage insurance lowers the lender’s risk of providing the loan to you by insuring the lender. Borrowers making a down payment of less than 20% will typically need to pay for mortgage insurance. It’ll increase your payments or certain costs during the process.

If you get a standard mortgage from a financial institution, they’ll most likely have a list of private companies you can use. This is called Private Mortgage Insurance or PMI. Under certain circumstances, you can cancel it after a period of time.

Piggyback Mortgage

A piggyback mortgage is the term for when a borrower uses two loans at the same time for the same home. It allows borrowers with a low down payment amount to take out additional money to qualify for the first mortgage and avoid mortgage insurance.

Here’s an example breakdown of what this could look like:

  • First mortgage: 80% of the home’s value
  • Second mortgage: 10% of the home’s value
  • Down payment: 10%

In order to qualify for this, you’ll need to meet certain credit score requirements and debt-to-income ratios.

USDA Loans

A USDA home loan is a great option for individuals individuals who meet specific income requirements and don’t mind a home in a more rural or up-and-coming suburban area. This mortgage doesn’t require a down payment for eligible homebuyers in specific areas and is issued through the USDA Rural Development Guaranteed Housing Loan Program by the United States Department of Agriculture. Even without a down payment, they offer reduced mortgage insurance options and low mortgage rates. However, look on the USDA Loans website to see if you’re eligible before making a decision. 


Use these options to educate yourself and learn more about what might work for you. If you need additional help, click the button below for more information on home loans and applications and contact our Mortgage lending team if you have any questions.