The larger the down payment, the less you are required to borrow.
The standard down payment amount is 20%
of the home's purchase price. For example, if you buy a house for $100,000 a 20% down payment would
require you to put down $20,000 and obtain a loan for $80,000.
Your down payment does not include closing costs.
What if you don't have 20%?
If you can't put 20% down, your lender will typically require you to pay a
mortgage insurance company to insure the lender against nonpayment or default on a mortgage. Mortgage
insurance payments are included in your
Buyers with less than a 20% down payment, but at least 3.5% saved could qualify for an
This is a government-backed program that offers fewer restrictions on your down payment and qualifying credit
score than conventional mortgages.
Whether you plan on buying a home in the next couple of years or further down the road, it's never too
late to start saving for your down payment. There are several steps you can take to add more money towards
your down payment each month:
- Create a separate savings account for your down payment. You'll be less tempted to spend it if it's away from the rest of your funds.
- Set up a predetermined amount to be automatically transferred into your savings account each month.
- Cut back on luxuries such as expensive meals and transfer these savings to your account.
If you have any questions or would like us to walk you through the various options, call
to talk to one of our experienced mortgage representatives.