How much you need to save for a down payment depends on the price of the house.
The standard down payment is 20% of the purchase price, but many first-time buyers put down less money up front and take on a bigger mortgage.
For down payments below 20%, the lender will typically require private mortgage insurance (PMI), which is an extra monthly payment on top of a mortgage payment.
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Buying a home requires a lot of planning, and it usually starts with saving for a down payment.
Experts have long recommended putting down 20% of the purchase price up front, if you can afford it, and financing the rest with a mortgage. In this case, you won’t have to get private mortgage insurance (PMI) — which would require extra monthly payments on top of your mortgage — and you may get more favorable loan terms, specifically lower interest rates.
But according to the National Association of Realtors (NAR), some 60% of homebuyers put down 6% or less of the purchase price. And 58% of buyers said the money came from their savings.
While millennials may be buying cheaper homes than Gen Xers and …read more
Source:: Businessinsider – Finance