How Much Do I Need to Save for a Down Payment on a Home?
When you purchase a home, the first payment you make is your down payment — a percentage of the total amount you owe, which is due at closing. For example, if you purchase a $250,000 home and make a 20% down payment, you would bring $50,000 to your closing.
Mortgage lenders require a down payment to protect themselves if you default on your loan. Many lenders prefer borrowers who can make a 20% down payment, so saving as close to 20% of the home's purchase price is ideal.
How Can You Buy a House With No Money Down?
Down payments can be a major hurdle for homebuyers, as it may take years to save up such a large amount of cash. However, it's possible to purchase a home without a down payment by taking a Zero Down Loan.
A Zero Down Payment Loan is a mortgage loan you can get without making a down payment.
Benefits of a Zero Down Payment Loan
A Zero Down Payment Loan is a great option for homebuyers who lack the savings to make a down payment. It allows borrowers to purchase a home without waiting to build up enough savings to put 20% down.
Making a 20% down payment may not be the best decision if it empties your savings. Instead, you can preserve the money you've saved up by opting for a zero-down payment loan. You'll have more money in the bank to put toward your other needs and expenses, such as building your emergency fund or making home repairs.