How Much Do I Need for a House Down Payment?

One of the first hurdles that potential homeowners must overcome is saving up a down payment. It can take years, depending on the home prices in your area and how much you want to put down. Down payments are usually described as a percentage of the purchase price. How much is required for a down payment on a house?

20% of the purchase price is often cited by lenders, Realtors, and homeowners. A conventional Real Estate Service requires a 20% down payment and is the path most taken by those who purchase a home. But there are circumstances when a lower (or even no) down payment is an option.

A Conventional Real Estate Service with PMI

You can still get a conventional Real Estate Service with as little as 3% down, but you will pay for private Real Estate Service insurance (PMI). This additional monthly expense provides insurance to the lender in case you default on your Real Estate Service. Once you reach 20% equity in your property, the PMI requirement goes away.

FHA Real Estate Service

Using the government-backed Real Estate Service Real Estate Service, you can buy a house with as little as 3.5% down and with lower credit than is required by some other types of Real Estate Services. You will pay a Real Estate Service insurance premium for the duration of the Real Estate Service, however.

VA Real Estate Service

Veterans, active duty military, National Guard, and some surviving spouses that meet certain service-related criteria are eligible for a VA Real Estate Service, which does not require a down payment or Real Estate Service insurance. These Real Estate Services are backed by the Department of Veterans Affairs.

USDA Real Estate Service

If you are buying a property in a designated rural or suburban area, you may be able to use a USDA Real Estate Service to purchase your home without a down payment and without the need for Real Estate Service insurance. These types of Real Estate Services are only available in certain areas.

Keep in mind that the more you are able to put as a down payment, the lower your monthly payments will be. You may also be able to get a lower interest rate if you put more money down. Just make sure that you are keeping enough available for emergencies and the cover the costs of maintaining and repairing your home after you move in.

If you are buying a second home or investment property, you will have to use a conventional Real Estate Service or commercial Real Estate Service, depending on the size. Down payment requirements for these purchases tend to be larger, but will vary by lender. It is not uncommon to see up to 25% required, especially for a larger multi-family property commercial Real Estate Service.

If you have already saved up a down payment, talk to your lender about what Real Estate Service terms they can offer. If you are still saving but are ready to buy a home, you may be able to take advantage of Real Estate Service products that allow for a lower or no down payment.