Standard Home Down Payment
As the editor of a popular home loan and mortgage website I receive a lot of email from people asking various questions about the mortgage loans. One of the most common questions I get is what is the standard home down payment.
It used to be safe to say that the standard home down payment was 20 percent of the purchase price. While this might have been true in the past, the housing market has changed dramatically in the last ten years and it is not necessarily the case any more.
One of the reasons for this is that housing prices have shot up so dramatically that the average person just doesn’t have that much money in savings. I happen to be in Los Angeles where the avarege home in a good neighborhood can easily run over six hundred thousand dollars. That would mean that you would have to have one hundred and twenty thousand dollars in savings and frankly, most people just simply don’t have that kind of money.
For this reason the standard down payment has changed as lenders have become more creative in an effort to drum up more business. These days there are all kinds of home loans available, some requiring twenty percent, others only five or ten. It is even still possible to get a no money down home loan though of course the less you put down, the harder the loan will be to obtain and more than likely the worse the terms will be.
One important thing to consider regarding the issue of the standard home down payment is that if you put less than twenty percent down, many lenders will require PMI insurance which will mean an additional monthly expense.
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