Did I Save Enough for My Down Payment?

A home purchase is not something you simply decide to do one day. If you've chosen to buy a house, you've likely put a lot of thought into the whole process and have been saving up for a while to make a down payment. However, even if you have been saving up, you may be wondering what is the right amount of money to spend on your down payment. The answer may surprise you.

The Answer to How Much Money You Need for a Down Payment

People may have been told that a 20% down payment is needed to purchase a home, however, this has not been true since 2005. The National Association of Realtors (NAR) states the median down payment required today is 14%, with repeat homebuyers at 17% and first-time buyers able to start at 6%. If your lender doesn't specify an amount, you may be eligible for a lower-than-average rate and can finally reach your goal of homeownership!

Down payments on a house vary greatly based on your finances. Some choose to put 20% down, but nothing is stopping you from selecting another amount. If you're concerned a large payment would deplete your savings, it might be best to pay something smaller that won't leave you short of money should an unexpected expense arise.

It can seem overwhelming and intimidating to figure out how much you should use for your down payment, regardless of whether it is your first or tenth purchase of a house. To figure out what you can afford to spend on your dream home, use a mortgage calculator to get a better idea of what your monthly payment will be.

What is the minimum down payment for a house purchase?

You might be wondering how much money you'll need for a down payment if you're planning to buy a house. Here are the must-knows about down payments to help you decide.

Is a 20% down payment required for a house purchase?

In spite of the fact that very few lenders still require 20% at closing, it might still make sense to pay the full 20% of the home's purchase price.

In order to decide whether a large down payment is right for you, you should weigh the pros and cons, as well as determine what is best for your finances and goals.

Is it possible to buy a house without a down payment?

You can buy a home with no money down, but you won't be able to get a conventional zero-down loan. You'll need a government-backed loan.

Insured by the government, government-backed loans present less risk to lenders since the government will cover your financial loss if you default. Lenders will be more inclined to offer lower-than-average interest rates and less stringent down payment requirements as a result.

Currently, you can buy a home with no money down if you qualify for a VA loan or a USDA loan. VA loans are mortgage loans for current and former members of the Armed Forces and surviving spouses. Rural and suburban homes can qualify for USDA loans.

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