A major step in the homebuying process is paying the down payment on a house. Deciding how much to put down can be tricky, however, and affects both your mortgage terms and buying experience in a number of ways.
To help you make the best decision, here are some key facts about down payments buyers should know:
The required minimum down payment to buy a house depends upon the type of loan you apply for. Conventional loans, while not backed by the government, follow the same regulations as government loans and typically require a minimum of 3% down payment.
FHA loans offered by the Federal housing administration require as little as 3.5% with a solid credit score.
Loans guaranteed by the U.S. Department of Veterans Affairs generally don't require a down payment at all. However, these loans have specific eligibility requirements and can have higher interest rates.
When market conditions are competitive, sellers will receive multiple offers for the same property. A larger down payment can give you a competitive edge.
However, it's important to remember closing costs when budgeting for your home purchase. Be careful of opting for a down payment that will leave you unable to afford the other expenses associated with homebuying.
The amount of down payment to offer is different for every situation. With a lower down payment, you may be required to pay private mortgage insurance, increasing your long-term costs. Lower down payments can also mean larger interest rates, which can add up considerably down the road.
Down payment assistance programs are available for first time buyers who need extra help to afford cash up front. Keep this and other options in mind when planning for your home purchase to ensure the best possible financial outcome.
My experience dates back to 2002 when I obtained my degree in Economics from Kalamazoo College and then immediately went to work as a sales manager for a 72 unit, new home development in Clarkston. I am in my 22nd year of full time residential real estate sales and real estate is my number one passion!
· I earned the "Top Producer" award at Morgan Milzow & Ford Realtors from 2007-2023
· My career accomplishments to date include over 1,000 homes sold and in excess of $315M in closed transactions
· I've been voted an Hour Magazine All-Star 2013-2023, an honor only given to the top 5% of Metro Detroit Real Estate Agents
· I'm a lifelong Clarkston resident & service all of Oakland County, parts of Genesee, Livingston and Macomb Counties, and my area knowledge, professionalism and real estate expertise is unparalleled
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· In 2022 I was awarded the Clarkston Chamber of Commerce Independence Women of the Year award for excellence in business and for my community contributions. In 2019 I received the Clarkston Community Businessperson of the Year Award. I’m also proud to have served my community as the Clarkston Area Chamber of Commerce President in 2018 & 2019. I'm a past recipient of the NOCBOR (North Oakland County Board of Realtors) Distinguished Service Award, nominated by my peers
· I consistently contribute to other, local charitable causes that are close to my heart including Tree of Dreams, benefitting Neighbor for Neighbor, SCAMP and Clarkston Schools
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