What are your requirements for a down payment?

At Stanford Federal Credit Union, we offer purchase loan programs with as little as a 5% down payment (maximum loan amounts apply) depending on your individual financial needs. You’ll also want to consider additional funds needed for closing costs, as well as any lender reserve requirements. Example: If you’re purchasing a $700,000 home, you would need $35,000 for a 5% down payment.

Getting your funds together for a down payment is probably the biggest hurdle for many first-time home buyers. You may already be worth more than you realize. When calculating your available assets, be sure to consider ALL of the following sources:

  • All checking and savings accounts
  • Stocks, bonds, brokerage, and retirement accounts
  • 401K loan (if offered by your current employer)
  • Gift options from immediate family members

What if it doesn’t add up to the right amount? Don’t give up hope. There are ways to make it work:

  1. Look for a loan option that requires a smaller down payment
  2. Consider getting a loan with Private Mortgage Insurance (PMI)
    • Allows for a lower down payment
    • Lenders (like us!) like it because it protects us in case you default on the loan
    • You can pay for it on a monthly basis
    • You can request to have it cancelled once you reach 20% equity
  3. Talk to one of our Mortgage Consultants for other available loan options like our 80/10/10 to avoid paying mortgage insurance (MI) – CA only.

Gifts from immediate family members are also an acceptable source of down payment. We’ll ask you for the contact information of the gift giver, as well as the donor’s relationship to you. Prior to closing your loan, we’ll verify receipt and deposit of the gift funds.

If you’ll be withdrawing funds from a 401(K) or retirement account to fund your down payment, we’ll probably ask you to show evidence that you have the funds available by providing a recent statement. We may also need to verify whether or not repayment is required. If repayment is required, it’s not a problem. We’ll just consider that monthly payment when making your loan decision.

Apply online or contact one of our Mortgage Consultants to get started with your Stanford FCU loan today!

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