How Much Cash Should You Put Down?

When you’re buying a home, you can put as much or as little of your own money into it as your finances dictate – from as little as 3% fro some loans to all-cash. It depends on your available money and the practices of different lenders.

A 5%, 10%, or 20% down payment is typical, and if you’re shopping for a mortgage, you can bet lenders will more readily commit their money when you commit a healthy portion of yours. Less than 20%, and lenders generally take a harder look at your whole financial situation. They are also apt to require either private mortgage insurance (PMI), or the government backing of the Federal Housing Administration (FHA) or the Veterans Administration (VA) – all good and available options for buyers who simply don’t have the 20% cash.

Under the new tax law, it may be to your advantage to pay the 20%, if you possibly can – especially if you have to buy private mortgage insurance. PMI costs you up front, at closing and again in annual premiums.

If you need help, we’ll be glad to advise you. Just e-mail us or give us a call.