| We hear it all the time: “How much should I have for a down payment?” The answer is… (drumroll, please)…it depends! And the “best” amount varies from buyer to buyer. Let’s break it down a bit further: |
| First, it depends on the type of loan. Generally, a down payment can range from 3.5% to 20%. You may have heard of the FHA loan, which is a wonderful option for buyers who don’t have a ton of money in their reserves. This loan only requires a 3.5% down payment. The downfall, however, is that there is a cap on the total amount of money you can borrow (see where your county stands: http://www.fhamortgagecenter.com/loan-limit-calculator.html). For a single-family home in Montgomery County, the cap is at $420,000. Not too shabby! |
| Of course, a major factor is how much you can comfortably afford to put down. Many of our first time buyers prefer to have a lower down payment, whereas seasoned homebuyers may be able to afford a bit more due to the equity in their previous home. As you’ve probably heard, there are benefits to putting down more money (such as not having to pay Private Mortgage Insurance). Typically, these benefits increase at the 5, 10, and 20% levels.
|
To better understand your situation, be sure to reach out to your EveryHome agent or a qualified lending professional. If you aren’t yet working with a lender, we would be happy to send you a lit of a few great loan officers in the area! Any other questions? 215-699-5555. We’re happy to help!
|
