How Much Do You Need for a Mortgage Down Payment?

man wearing a suit sitting in a table showing a mortgage loan contractHow much money do you have to put down for your house’s down payment? Most people will tell you that you need to save up 20% of the entire cost of your potential home. But experts have a few important reminders for home buyers like you.

20% Down Payment Misconception

While 20 percent may be the gold standard, not every home buyer has to get all that money. Depending on your situation, you can negotiate a lower percentage. You may even qualify for zero down payment. Wasatch Peaks Credit Union outlines some factors that may affect the amount you need to put down:

Loan Type

Just like rates, down payments can vary depending on the mortgage type you choose. Several loan options allow home buyers to make a down payment lower than 20% of the home’s purchase price.

For instance, if you have a Veteran Affairs certificate of eligibility, you can apply for a VA loan in Ogden. You may then get up to 100% financing on the value of the house you’re buying. Federal Housing Administration loans are also a good option if you’re shopping for a low down payment mortgage.

Home’s Location

Sometimes, lenders offer loan products specific to geographic locations. The location of the property in question may then affect both the interest rates and down payment requirements. For example, if the house you’re buying is in a rural area, you may qualify for a special loan program with a low or zero down payment.

Borrower’s Creditworthiness

Creditworthy home buyers can choose from a variety of loan options. Private mortgage insurance is an ideal option for buyers who have a good credit score and need a low down payment loan.

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Don’t let the 20 percent down payment issue keep you from getting the mortgage you need. If you can’t afford much down payment, some safe mortgage lending options can suit your unique situation. Talk to a reputable lender about how much you’re comfortable raising, and then discuss the available financing options.