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Mortgage Down Payment – How Much To Pay?

Many people have questions on the amount of down payment that must be made towards their house. This is usually the case for first time home buyers. If its your first time, you would purchase your home with a 20 percent mortgage down payment and close the cost of your home to 3 to 5 percent of the full value, and enough money left with you to use for household expenses for the next one or two months. This usually makes the lender happy, with the large amount of initial down payment, and sometimes turns up a good deal. The disadvantage of this type mortgage loan is the large sum of money due. We are talking $50,000 on a $200,000 loan, or a $70,000 down, on a $250,000 loan.  However, the good thing is that presently, more people are financing 95% or even 97% of thier home value. This is because they don\’t have to put the risk on someone else. It\’s now common for first-time buyers to put down only 5% mortgage down payment, or $7,500 on a $150,000 loan.

This may sound good, but small down payments come with a heavy price tag in the long run. You begin with very little equity in or home. Also, if you don\’t put up a 20% initial down payment, you would need to look into mortgage insurance, which would top near a grand a year, if you put $5,000 on $150,000 loan or similar. If you are buying in a city area or have a low income, research around for some programs offered by your state, which would yield a low down payment or low interest rate. If you\’re really stumped on cash, you can get a full one-hundred percent financing by getting a second loan, which is 20% of the house price, on the 80% mortgage loan. However, the second mortgage will come with a higher rate.

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4 Responses to “Mortgage Down Payment – How Much To Pay?”

  • Ryan says:

    They also have a zero downpayment plan, how does that work?

    Reply
  • Mortgage2Nite says:

    First Of All, Thanks For Visiting

    Tomorrow’s post will be dedicated to your question. Keep an eye out for it :)

    Visit Again!,
    Mortgage2Nite

    Reply
  • Maisier says:

    that informatoin will be usefull for me as well. I will have to come back, to check that out.

    Thanks Mortgage2NIte,

    Reply

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