In the current lending environment, the amount of down payment that is required has become very flexible. Traditionally, banks have preferred to see a down payment of 20%, but the amount required as a down payment has dropped to 10%, 3%, or in some cases, 0%. Buyers who put down 0% still need to cover closing costs, but this can be a great option for someone buying their first house.
Remember, the more you put down on a house, the lower your loan will be, resulting in a lower payment. If you put less than 20% down you may be required to pay for PMI, or mortgage insurance for the lender. But even this is becoming more flexible. You should consider the items listed below and then talk to your lender about different loan programs available and how they mesh with your specific situation. If you want to learn more, visit www.quickenloans.com and talk to a banker about the loan program that might be right for you.
Some of the things to consider when you decide how much of a down payment you will need are:
- How much can you comfortably afford to put down?
- How much work does the house need before you can move in?
- How much of your savings will you need for upcoming expenses?
- How quickly will you be able to replenish your savings with the new expense of a house payment?
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