How Much Do You Really Need for a House Down Payment?

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 home ownership but how much cash do you actually

00:09need to scrounge up for a down payment according to nerd wallet 20 is widely considered the norm

00:15but only because that's what many lenders use for requiring mortgage insurance on a conventional

00:20loan for the national association of realtors the typical down payment for first-time homebuyers in

00:252021 was only seven percent while a larger down payment can give you a better interest rate on

00:31your mortgage and a lower principal if it leaves you high and dry when it comes to future repairs

00:36and maintenance it may not be worth it if you meet certain income requirements some conventional

00:42mortgages like home ready and home possible require as little as three percent down nerd wallet reports

00:48is your credit score over 580 you may qualify for an fha loan which requires as little as 3.5

00:55down or if your credit score is at least above 500 10 coming up with the right down payment is purely

01:02up to you and your financial situation just make sure you leave enough behind to cover closing costs

01:08the ongoing costs of home ownership in general and of course furnishing your new home once you've moved in