How much should you pay?

Should you put down a 20% deposit on a home even if it isn't required? The answer is no in a lot of situations. In reality, most people only put down 6-12 percent. However, the appropriate amount for you is determined by your circumstances.

For example, if you have a lot of money in the bank but a low annual income, having the largest down payment possible could be a good idea. This is because a high down payment reduces the size of your loan. Your monthly payment would be lower as a result of this.

Down payments are often, though not always, required in order to receive a loan.  Some mortgages (example: VA loans) don't even need a down payment.

Down Payments: How Much is Enough?

If you’re saving up to buy your first home, or wondering if you have enough equity to to trade out for another, you may be relieved to know that for most buyers, low down payment options are still available.

Most people think 20% down is required, but that is not the case. There are lots of different loan programs that are designed to help people out. Arc Home can help simplify the process from start to finish.

0 Down

The Veteran’s Administration and US Department of Agriculture (USDA) both offer a zero down payment loan program for individuals and properties that meet the criteria. 

3.5% Down

The Federal Housing Administration (or FHA) loan program can allow as little as 3.5% down and is more lenient than most other programs on minimum credit scores and other factors.

5%

Fannie Mae/Freddie Mac Conventional loans are available with down payments as low as 5%. The minimum on these programs can change dependent on factors such as property type, credit score, occupancy, and so on.