How much should I save for a down-payment?

When prepping to buy a home, especially as military families, it can be challenging to determine how much cash you want to put down. You’ll hear experienced lenders recommend using the governments money in lieu of your own with the VA Home Loan 100% financing option. While this may work in some situations, it isn’t a one size fits all. 

Utilizing a no-payment down option may leave more in your savings but it can also add a bit of risk to your portfolio when you are ready to sell. Take today’s market for an example. Home prices skyrocketed in 2021 by nearly 19% as buyers scrambled to scoop up a short-supply of homes. With it leveling out and stabilizing, there’s going to be an expected reduction in home-value, too. Though your home will generally gain some value (especially with updates) there’s still the risk that it won’t. With a 100% financing loan, this could mean having to shell out costs when its time to sell. 

There are ways to reduce this risk, however. Buying in ideal locations for schools, access and quality of living can increase the chance of your home not only maintaining value but growing, too. 

Another downside to no down payment is a higher loan origination fee if you utilize a VA Home Loan. Although it’s still much cheaper than paying PMI – it can still add up, especially if it isn’t your first time utilizing the benefit. 

Making the decision on whether to put money down or not is a personal choice and one that should probably be made through good research and a deep dive on your budget. 

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This post was provided to us by Jessica Manfre at Caliber Home Loans. As a military family, you need home loans specific to your needs. You deserve a trusted home loan company that is committed to serving you. MilHousing Network is proud to partner with Caliber Home Loans, Inc. to bring military families mortgage options when buying a home. Contact them today at 855-202-1124 or visit www.calibermilitarylending.com to learn how they can support your unique military lifestyle.