Most home loans will requite a down payment. The down payment is utilized to confirm your ability to cover the cost of your home. But how much does the down payment have to be?
20% Is the Standard
A typical home loan will require you to put down about 20% of the value of your property. The more money you put down, the less risk the mortgage lender takes. This can be prohibitive to some people though, which is why many loans for first-time home owners might require lower down payments.
Can It Be Lower?
Some home loans might require you to put down as little as 3%. These include loans for first-time home buyers. These loans often work well for people who are first time homebuyers.
Can You Get Something Without a Down Payment?
People who qualify for USDA or VA loans can get them with no down payments required. But the USDA loans are for farmers in rural areas while VA loans are for veterans and current military members.
Consider Your Loan
There are no real standards as to what you have to spend on your down payment. But whatever you spend, you should know that you could potentially spend less money over the life of your loan when you spend more on the down payment. This comes as the principal you would owe on the loan will be lower. This could mean thousands saved in interest over time. Be aware of what you are doing with your down payment when getting a home.