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I know that while taking out a mortgage to buy a home, I will be liable for paying down payment. I have a lump sum amount saved and I would like to know how large a down payment to make. Please help.

sara · Posted: Mon Oct 31, 2011 11:51 pm Post subject:

Hi Harold,

In case of a conventional mortgage, you will have to make a down payment of 20% whereas in case of a FHA loan, you need to make a down payment of 3.5% - 5%. However, if you make a higher down payment, it will not only reduce the mortgage insurance premium but will also bring the loan amount below the conforming loan limit. Apart from that, it will also lower your interest rate. Now it will depend upon you how much down payment you want to pay.

Take care

petekolackovsky · Posted: Tue Nov 01, 2011 5:42 am Post subject:

Hey Harold,

Just to add to what sara said, lenders absolutely looove when borrowers make a bigger down payment. It means that they have to give out a lower loan and shows that you have the money to pay off the rest of the mortgage. A great tip is to find that perfect medium between the lowest amount payable and how much you can afford.

Hope I could help!

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