THE MADRONA GROUP REAL ESTATE FAQ VIDEO SERIES
HOW MUCH DO YOU NEED FOR A DOWN PAYMENT?
Jason fox of The Madrona Group real estate team answers the question... "How Much Down Payment For a House?"
There are still plenty of 0% down loans available for conventional loans. There are good 3.5% and 5% down loans available for FHA loans.
Often times people think that you need 20% down to buy a home. However, that is actually less common than 0%, 3.5%, 5% and 10% loans.
The reason most people assume you need 20% is that is the amount you need to avoid paying private mortgage insurance (PMI).
The insurance is a percentage of the loan amount annually, paid monthly with your mortgage payment. PMI is nothing to be afraid of. PMI simply protects the lender in the case of foreclosure, and its cost is generally well worth the gains in home equity associated with purchasing sooner and making a smaller down payment.
It is best to talk to a professional mortgage broker about what would be best for you.
How Much Do You Need For Down Payment On A House? Real Estate FAQ [VIDEO TRANSCRIPT]
This is Jason Fox with the Madrona
group and today I'm answering frequently
asked questions about real estate. One of
those is, How much down payment do I need
to buy a new home? A lot of people
kind of have a 20% down payment idea in
their head and that's generally because
that's what you need to buy down
mortgage insurance. However, there are a
lot of zero down loans, in addition
there's some 3.5 and 5% FHA loans and
even some 5% and 10% conventional loans.
PMI or private mortgage insurance is
nothing to be afraid of it's just an
insurance that the bank puts on you to
make sure that they're protected in case
of a foreclosure. Obviously, if you can
get away from having PMI that's better
but often times the cost of the PMI is
well worth the gains that you'll make in
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