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Ali's Monthly Tip - May 2018

May 16, 2018


Yes you can! And there are a whole host of options! Many choices depend on your unique situation, so make sure to talk to a trusted Realtor or loan officer to find a solution that fits your goals and your budget.


Getting in with less than 20% down is more common than you would think. VA financing (available to veterans) offers financing with 0% down, while FHA has as little as 3.5% down. Typically with less down (VA excluded), you will encounter higher mortgage insurance rates, which are paid on a monthly basis. Mortgage insurance (MI) unfortunately is not tax deductible. But if you can make it to 10% down, there are ways to say goodbye to MI.  One of the more common solutions is a first loan amounting to 80% and a second loan at 10% with no mortgage insurance. For a borrower (i.e. home buyer), this can be a great option since interest is tax deductible! Although the interest rate on the second loan may be higher, the balance is comparatively small and there's an added benefit of the tax write off.


20% down is still a great threshold to be at, but if you need extra cash for repairs, renovations or to get your foot in the door, it's a viable option. With limited inventory and interest rates predicted to increase, it's nice to know that less than 20% down is an option.... and a common one at that.



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ALI EVANS |   Realtor & Broker Associate

Berkshire Hathaway HomeServices, 3868 State St., Santa Barbara, CA 93105

805.980.8007  DRE# 01846603

Office DRE# 01317731

©2019 Berkshire Hathaway HomeServices California Properties (BHHSCP) is a member of the franchise system of BHH A liates LLC. BHH A liates LLC and BHHSCP do not guarantee accuracy of all data including measurements, conditions, and features of property. Information is obtained from various sources and will not be veri ed by broker or MLS. Buyer is advised to independently verify the accuracy of that information.