How much down payment should I pay on a house?
Many financial experts used to recommend that you put 20% down to purchase a home. Plus, buyers who pay 20% or more as a down payment avoid having to pay for private mortgage insurance (PMI). However, recent data shows that the majority of home buyers put less than 20% down.2 How much you put down will depend on several factors:
- The price of the home
- How much savings you have
- Your desired monthly payment (the more money you pay upfront, the lower your monthly loan payment will be)
- Your lender's requirements
Some lenders offer lower down payment options to first-time home buyers. Buyers with credit scores of at least 580 may qualify for FHA loans3 (loans insured by the Federal Housing Administration), which only require a minimum of 3.5% down. FHA loans are not limited to first-time home buyers, and there is no minimum income requirement to qualify. There are limits to how large the FHA loan can be, and those limits vary by state and also change from year to year. Ask your lender for more details.
What can I do if I don't have money for a down payment?
A down payment can come from many sources, including your own checking and savings accounts, investment accounts, or gift money from family members. If you're gifted the money for a down payment, you'll have to show documentation that the money was indeed a gift and does not need to be repaid.
Still don't have the money? Experts have highlighted some other creative ways4 to gather money for a down payment, including employer-sponsored housing assistance programs, crowdsourcing a down payment in lieu of wedding gifts, and government assistance programs.
If you have questions about down payments for a mortgage, please contact a Synovus mortgage specialist near you. We're here to help you on your path to homeownership.