Buy your first home with 3 percent down

If a large down payment is keeping your first-home plan on hold, an eligible conventional purchase loan may let you start with 3% down.

Here’s the down-payment math: on a hypothetical $250,000 purchase with a $250,000 appraised value, 3% is $7,500, leaving a $242,500 base mortgage. Closing costs, prepaid expenses and any savings the lender requires you to keep after closing are additional. This is an illustration of the down payment, not a loan quote or the total cash needed to close.

For this option, at least one borrower must qualify as a first-time homebuyer and the property must be an eligible one-unit primary residence. Credit, income, debt and requirements from the lender’s automated eligibility review still apply. Required homebuyer education must also be completed.

A low down payment generally means mortgage insurance. I’ll review the full payment, including principal, interest, mortgage insurance, taxes and homeowners insurance, along with the savings you want left after closing.