What is the Minimum Down Payment to Buy a Home?

Posted by Lee and Katherine Keadle on Monday, October 16th, 2017 at 1:21pm.

minimum down payment for a home

We recently had a conversation with a first time home buyer who was living with her parents and working hard to save up a 20% down payment. She didn’t realize that she had already saved three times the amount she needed!

This miscalculation got us wondering…how many home buyers actually know the correct minimum down payment it takes to purchase a home? We thought we’d put together this blog to help other home buyers who are currently saving up their funds!

Primary Residence Purchases

  • VA* and USDA: 0%
  • First Time Home Buyer Conventional: 3%
  • FHA: 3.5%
  • Conventional: 5%
  • Jumbo: 5%

Investment Properties and Second Homes

  • Conventional Second Home: 10%
  • Conventional Investment: 15%
  • Jumbo Second Home: 20%
  • Jumbo Investment: 25%

*For a VA loan, it’s important to note that there’s no PMI (Private Mortgage Insurance), but VA loans have a hefty funding fee that is added to the loan amount. In other words, this fee is not an out of pocket expense for the buyer.

Other closing costs that come out of pocket typically come to about 3% of the purchase price of the home. Some of the discount points and fees can be structured so that the seller pays for some of these costs. If you haven’t yet saved up the money for your down payment, go ahead and talk to a lender because he or she will be able to give you the most accurate number for the total amount you’ll need to have at closing. And if you need a recommendation for a trusted lender, contact us to get started!

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