Mark Glendon

How Much Should You Put as a Down Payment on a House?

A house is often the most expensive purchase people make their entire lives. Saying it's daunting is an understatement!

One of the first hurdles in buying is saving up for a down payment. Traditionally, 20 percent down is the norm. But do you have to pay that much to get a house?

Busting the 20 Percent Myth

Ask any NYC real estate closing lawyer what the average down payment is, and they'll tell you it's 20 percent of the home's purchase price. That's the standard, and it's been that way for many decades.

But, we're here to tell you it's not the only option!

The 20-percent hurdle can feel unattainable, and it's why so many people put homeownership off longer than they need to. There are perks to going the traditional route. More on that later.

However, you can pay much less. In some cases, you can pay zero percent down!

Many government-backed loans and programs exist, offering a much lower down payment. Take, for example, a Federal Housing Authority (FHA) loan. You can pay as little as 3.5 percent if approved for an FHA-backed mortgage.

You may also qualify for a VA loan offered through the United States Department of Veterans Affairs or a USDA loan. Both options don't have a down payment requirement, allowing you to get your home with zero percent down!

Those government-backed programs have more requirements, but they're an excellent option worth considering.

Why Try for 20 Percent?

An NYC real estate closing lawyer can guide you in the right direction while overseeing the purchase of your new home. They can help you navigate the complexities of conventional and government-backed mortgage options.

If you're capable of doing 20 percent down, most real estate experts recommend that you do. There are a few reasons for this. The most impactful is your ability to forgo private mortgage insurance and the chance to secure better interest rates. Paying 20 percent down can lower your monthly bill and give you a competitive edge when bidding on an in-demand home.

Ultimately, the right choice for you depends on your financial situation. If you can put 20 percent down, doing so could make paying for your home much more manageable. But if you can't, homeownership isn't as out of reach as you might think. Thanks to government-backed loans and programs, you have plenty of options.

Author Resource:-

Mark writes often about estate planning. His articles may include topics like real estate closing attorney and business succession laws to help the people in needs. You can find his thoughts at real estate law blog.