When it comes to buying a home and acquiring a loan for your home, there are so many variables that contribute to what kind of loans people get. Especially when it comes to down payments. So, how much are people really paying for the down payments on their homes?
Most people pay no more than $5,000
Most people put off buying a home for years longer than they’d like because they’ve been told that in order to buy a home, they should have at least 20% of the cost of the home ready to put down as a down payment. But most people aren’t putting that much down! In fact, recent surveys show that about 28% of home buyers pay a down payment of only about 5% of the total cost of their home. And about 13% of home buyers don’t put down any down payment at all.
Is a 20% down payment really necessary?
Ultimately, the amount that you choose to put down for a down payment is a decision that you will make for yourself, with the help of your loan officer. Most potential home buyers are surprised to learn that a 20% down payment is negotiable, and not required in order to purchase a home.
How to know how much to put down on your home
When it comes to any large financial decision, you have to carefully decide what the right decision is for you. Your loan officer will be one of the biggest helps in making this decision. They can let you know what your monthly payments will look like, as well as various interest rates, in relation to different down payment amounts. Consider what is going to work best for your financial situation and what you can afford on a monthly basis. The larger down payment you can afford, the lower your monthly payment will be, and you may also be eligible for a lower interest rate, as well. So even though you are paying more upfront, you may end up paying less for your home loan overall.