down payment
This is a major question on every borrowers mind—“How much money do I have to put down?”
Twenty percent down is the traditional standby required by banks. With the invention of mortgage insurance you can do as little as 5% down; with an FHA loan it can be as little as 3%. And with special financing, the down payment can be $0.00.
In addition to a down payment, purchasers also need cash for closing costs (the final costs associated with closing the loan). Several newly emerging loan programs not only allow the purchase of a home with no money down but also underwrite closing costs.
Not everyone, however, elects to purchase with little or no money down. Less money down means higher monthly mortgage payments, so most home buyers choose to buy with some cash up front.
Based on your household income and down payment, you can get a good idea of what price-range you should be looking in. |