When it comes to figuring our whether you have enough money to buy a home, the down payment is normally the biggest stumbling block. Some buyers mistakenly think they have to have 20% down and this is true, if you want to avoid the Private Mortgage Insurance or PMI fee on your monthly payment, since most conventional loan lenders require it. You can still purchase a home for less than 20% down and many homes are purchased with as little as 3% to 5% down under FHA and VA loan programs.

Even conventional loans can be found for as little as 5% down, based on your credit, but this isn’t as commonplace as in the past, since lenders are getting tougher on equity requirements. Part of the reason for the first time home-buyer tax credit is to help with these requirements because it is available for 10% of the down payment, up to $8,000, if you write a contract before April, 2010 and close by June, 2010, which makes now the best time to purchase.

The larger your down payment, the better your chances of getting financing and the more equity you will have, so it is good to save as much as you can. There are many options that can be worked out on down payments including the seller carrying back a second mortgage, if the situation is right. You have to consider that many sellers don’t have equity to help because home prices have dropped. If you can take advantage of the first home buyers programs or the FHA loans, that might be the best options.

Even when the first-time homebuyers’ tax credit expires, there are always special government loan programs for first time buyers. When you find a great program or tax incentive and you are thinking about purchasing a home, you have to act quickly to take advantage of it. Sometimes, you will miss out on the opportunity to get a great deal on a home if you try to save up the down payment on your own.

There is no better way to get into a new home than to take advantage of these programs and tax incentives for your down payment. You shouldn’t let the down payment keep you from purchasing a home, but you should figure 5% as a minimum number, just to be on the safe side. To qualify for the FHA and VA loans, there might be more paperwork to go through and conventional loans for 5% down will require PMI insurance, in most cases, but if your credit is good, you shouldn’t have any problem.

Since homes are at the lowest prices in years and some markets offer deals at 50% of the price the market prices were at just two years ago, now is the best time to buy a home and there are options to help you with the down payment, if you act quickly. The first-time home buyers’ tax credit has been extended, but it’s not guaranteed to happen again. You can always consider the other government programs to help you get into a home at a great price, if you miss the deadline, however.

For information about the Sarasota real estate market, visit PremiumPropertiesSarasota