The down payment. Cue the dramatic, fear-filled suspense music. Yeah, it’s scary. Coming up with enough cash to put down when buying a house is the single biggest roadblock for most hopeful homebuyers. But how much do you really need?
A standard down payment
Most lenders are looking for 20% down payments. That’s $60,000 on a $300,000 home. (There’s that scary music again.) With 20% down, lenders will love you more. First off, you’ll have a better chance of getting approved for a loan. And you’ll earn a better mortgage interest rate. There are all sorts of other benefits too:
Lower upfront fees (we’ll talk more about that in a second)
Lower ongoing fees (more on that too)
More equity in your home right off the bat
A lower monthly payment
Of course there is one big, juicy caveat: The down payment is not the only upfront money you have to deal with. There are loan closing costs and earnest money to consider as well. Before the dramatic music returns, let’s explore some lower down payment options.
Getting in for less
You can actually buy a home with as little as 3% down. Why did we wait so long to give you that good news? Well, let’s provide the details first before we weigh the pros and cons.
The Federal Housing Administration is a government agency charged with helping homebuyers — especially first timers — get approved. The FHA assists mortgage lenders to make loans by guaranteeing a portion of the balance. That’s how you can put less money down — in fact, as little as 3.5%.
see more: https://www.nerdwallet.com/blog/mortgages/payment-buy-home/
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