Patrick Jones

First Trust Home Loans

  • Home
  • About Patrick
  • Reviews
  • Blog
  • Resources
    • First Time Home Buyer Tips
    • First Time Home Seller Tips
    • Closing Costs
    • Home Appraisal
    • Home Inspection
    • Loan Checklist
    • Loan Process
    • Loan Programs
    • Mortgage Glossary
    • Mortgage FAQ
  • Download My App
  • Contact
You are here: Home / Home Buyer Tips / 5, 10, 20 Percent or More? How to Determine How Big of a Down Payment You Need

5, 10, 20 Percent or More? How to Determine How Big of a Down Payment You Need

January 6, 2016 by Patrick Jones

5, 10, 20 Percent or More? How to Determine How Big of a Down Payment You NeedWhether or not you’re new to real estate, there’s little doubt that you’ve heard the term down payment as it relates to purchasing a home. There’s a lot of different information out there in regards to how much this figure should be and it can be hard to determine exactly what the importance of this payment is. If you’re trying to determine the ideal amount to put down, here are some things to consider.

Explaining Down Payments And Why They’re Important

The down payment is probably one of the largest single payments you’ll make for anything, and this is why so many people save for years. When you buy a home, the down payment is the amount of money that goes into the initial home investment, and this is taken off of the cost of the house. In essence, while this money qualifies as an asset, it is tied up in paying off the total cost of your home.

The Differing Amounts For Down Payments

It’s often the case that many figures are thrown around in regards to the ideal down payment percentage, and they generally vary from 3-20% of the home’s cost. If you are paying a percentage on the low side of the scale, this can unfortunately mean that you will have fewer mortgage options and will be stuck with an increased interest rate. The amount you should pay depends on your financial health and purchasing commitment, but the larger the down payment is, the more minimal your monthly payments will be.

Deciding The Perfect Percentage

Saving up 20% of a home’s total price may seem like a lot of time and effort, but this can be the ideal amount to put down. In addition to lowered monthly payments and a better interest rate, you’ll also be able to avoid Private Mortgage Insurance (PMI), which is required if you put down less than 20%. There is no right answer to the question of how much to put towards a down payment, but you may end up spending less in the long run if you can invest more in the beginning.

There are many figures thrown around when it comes to real estate, but the amount of a down payment should be economically feasible for you and enable you to make your monthly payments consistently. If you’re planning on purchasing soon and are looking for home options, you may want to contact your trusted mortgage professional for more information.

Filed Under: Home Buyer Tips Tagged With: Buying a Home, Down Payments, Home Buyer Tips

Patrick Jones Headshot

Get in Touch


Patrick Jones
Mortgage Lender

Call 615.668.6838
Email: pjones@myfthl.com
NMLS #203203
First Trust  Mortgage Logo

How can I help?


0 / 180

Connect with Patrick!

Browse Articles by Category

Recent Articles

  • White Lies That Could Make It Harder To Buy A Home
  • Rebuilding Costs: Rethinking How Much Homeowners Insurance You Really Need
  • 5 Tips for Crafting a Counter-offer That Doesn’t Scare Away a Potential Home Buyer
  • What’s Ahead For Mortgage Rates This Week – March 27, 2023
Patrick Jones NMLS# 203203
F&M Mortgage NMLS# 518158
Equal Housing Lender

Looking for something?

Our Location


1639 Medical Center Pkwy
Murfreesboro, TN 37129

Copyright © 2023 · Powered by MySMARTblog