How much down payment do I need?

Question

First time home buyer in a few yrs. If I have good credit, and want to save down payment to a $275,000-$300,000 house...What is the minimum and the ideal down payment ??

Answer 1

An FHA loan only requires 3% down.  However, you will have to pay mortgage insurance until you get down to 80% loan to value.  

The ideal down payment is 20% so you won't have PMI but FHA is a great loan for first time buyers- up to 30 years with low fixed rates.

Answer 2

20%

Answer 3

The minimum will vary by lender.

The ideal down payment is no down payment at all, but for most of us, 20% is the target because it eliminates the need to pay for PMI (private mortgage insurance), and will earn you a better rate than, say, a 5% down payment.

Answer 4

What monthly mortgage payment do you feel comfortable with?  The ideal down payment would be 20% so you would by-pass mortgage insurance, but it could be as little at 3% to 5%.  In a few years, 100% loans may be back in vogue, but you see where that got most folks.

Answer 5

The minimum can be 0% down, although there are very few lenders making thoses loans anymore.  A 20% down payment will exempt you from having to pay PMI (private mortgage insurance) so that will save you some money each month.  But more importantly, in order not be become "house poor", don't let your mortgage payments be higher than 1/4 to 1/3 of your monthly net income.  If the mortgage payments are higher than that, then the house is too expensive for you.  And PLEASE make certain that you get a fixed rate mortgage.  This whole foreclosure mess that is happening  because people bought more expensive houses than they could comfortably afford AND they used adjustable rate mortgages.  When the rates went up, the mortgages also adjusted up and since housing prices have gone down the houses are not worth what they still owe on their mortgages and they can't refinance because of that.  Look for a less expensive house so that you will still be able to afford to live the rest of your life and not just be a slave to your house payment.