How much down payment is required for a house?
Ideally, you will have saved enough money to make a 20% down payment on a home you’d like to purchase. With a 20% down payment, you can typically avoid paying for private mortgage insurance, known as PMI. With a down payment less than 20%, you’ll likely need to make monthly PMI payments until you’ve accumulated 20% equity in your house.
However, if you don’t have 20% saved up, don’t fret – you may still be eligible for a mortgage with less than a 20% down payment, depending on the types of mortgages your lender offers.
Other expenses involved when buying a house
There are many other expenses involved in buying a house in addition to a down payment, including closing costs, insurance, taxes, and other costs involved with homeownership. Determine what you can handle before you start looking. Coming up with a house budget and sticking with it will make your life much easier in the short and long term. The more organized you are, the smoother the homebuying process will be.
To learn more about mortgages from Laurel Road, go to laurelroad.com/mortgage.
