You may be able to lock down a conventional mortgage with as little as 3% down. Your personal situation, lender, and the type of loan you choose will dictate your exact down payment requirements. If you’re not a first-time home buyer, for example, a down payment of at least 5% may be required. In the event you opt for a jumbo loan, you may need to put down as much as 20% to 40%.
If you take out a conventional loan and put down less than 20%, you’ll be responsible for private mortgage insurance or PMI. You’ll likely pay PMI along with your monthly payment but you may be able to cover it upfront if your lender permits. Fortunately, PMI isn’t permanent as you won’t owe it once you reach 20% equity in your home.
You may be able to lock down a conventional mortgage with as little as 3% down. Your personal situation, lender, and the type of loan you choose will dictate your exact down payment requirements. If you’re not a first-time home buyer, for example, a down payment of at least 5% may be required. In the event you opt for a jumbo loan, you may need to put down as much as 20% to 40%.
If you take out a conventional loan and put down less than 20%, you’ll be responsible for private mortgage insurance or PMI. You’ll likely pay PMI along with your monthly payment but you may be able to cover it upfront if your lender permits. Fortunately, PMI isn’t permanent as you won’t owe it once you reach 20% equity in your home.
One of the most noteworthy benefits of conventional loans is their affordable interest rates. The lowest rates usually go to borrowers with the best credit and shorter loan terms. So if you have a 700 credit score and opt for a 15 year home loan rather than a 30, you’ll likely land a great rate. This will allow you to save thousands upon thousands of dollars over the life of your loan.
