Please help How much of a down payment is usually needed?
kaangel217
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Please help How much of a down payment is usually needed?
I have no clue on the whole house buying process. My FH are planning on saving $$ for the next 2 years. I'm wondering how much is usually needed for a down payment? I heard at least 10% is that correct? Or is it more? Any advice is much appreciated.
Re: Please help How much of a down payment is usually needed?
PMI - Personal (or private) mortgage insurance? (I think)....its insurance for the lender to make sure that you are going to pay your mortgage...since you don't have as much in the house as equity...so there is less for them to seize if you foreclose
ETS: this is only until you have 20% of the original house price in equity...sometimes if the house appraises quickly you can use the appreciation to refinance...again I think...
I think 10% is a good goal for now...although you may want to talk to a mortgage dealer to see what you can afford...and there are ways that you can put down less...
Mandy77
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Re: Please help How much of a down payment is usually needed?
Some people put as little as 5% down...but that will sometimes bring your interest rate up. Some companies don't charge PMI...mine doesn't.
antoinette
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Re: Please help How much of a down payment is usually needed?
20 % to get a conventional mortage. Lower and you can get a fha mortgage. you may have to pay pmi though but there are ways of getting around it
ILT1221
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Re: Please help How much of a down payment is usually needed?
You can put down less than 10%. It is best to talk to a mortgage banker/broker so they can give you the best options based on the amount of loan you want.
Sweetie2004
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Re: Please help How much of a down payment is usually needed?
If you put less money down, don't your monthly payments go up? Someone told me that for every $100,000 you morgage, you pay $800 per month. For instance, if a house is $444,000 (trying to make the math easy on myself ) and you put $44,000 down, you are morgaging $400,000 so you'd be paying about $3,200 a month in morgage....YIKES!!! Is this true for any of you??? At that rate, I'll be in this apartment forever
Mandy77
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Re: Please help How much of a down payment is usually needed?
Colleen,
That is sort of true....the less money you put down, the higher interest rate you will have. This happens because the more money you put down, the more equity you have in the house will be less likely to default on the mortgage...that is also why banks charge PMI with less than 20% down.
Let me know if you have any other questions, I'm a loan officer.
