This Is How Much Money You Need To Put Down on a House

Scrounging up the cash for a down payment can be a major hurdle as a first-time home buyer, but it doesn’t have to be.

Transcript

00:00So you're finally ready to start down the path of homeownership, but how much cash do

00:09you actually need to scrounge up for a down payment? According to NerdWallet, 20% is widely

00:14considered the norm, but only because that's what many lenders use for requiring mortgage

00:19insurance on a conventional loan. For the National Association of Realtors, the typical

00:23down payment for first-time homebuyers in 2021 was only 7%. While a larger down payment

00:30can give you a better interest rate on your mortgage and a lower principal, if it leaves

00:34you high and dry when it comes to future repairs and maintenance, it may not be worth it. If

00:39you meet certain income requirements, some conventional mortgages like HomeReady and

00:44HomePossible require as little as 3% down, NerdWallet reports. Is your credit score over

00:49580? You may qualify for an FHA loan, which requires as little as 3.5% down. Or, if your

00:56credit score is at least above 500, 10%. Coming up with the right down payment is purely up

01:02to you and your financial situation. Just make sure you leave enough behind to cover

01:07closing costs, the ongoing costs of homeownership in general, and, of course, furnishing your

01:13new home once you've moved in.