How Much Of a Down Payment Is Required to Buy a Home? The answer of course is… it depends.
Down payment amount depends on many factors including the buyer’s credit profile, how much money they make, or even the address of their new home. Generally speaking, buyers must come up with a minimum of 3% of the purchase price as a down payment. The average first-time home buyer down payment was 6% in 2015 according to NAR.
When contemplating a possible home purchase, buyers should plan on setting money aside for their down payment. But if personal savings are not going to be enough there are several other sources of down payment funds buyers should consider. A very common down payment source for first time home buyers is a gift from a family member. Buyers can also use funds set aside for retirement for their down payment.
Credit score requirements continue to fall. The 723 average score is the lowest since Ellie Mae began reporting on scores in August 2011. The availability of down payment funds is usually the most difficult part of buying a home, particularly for first-time homebuyers. The good news is early consultation with an experienced mortgage professional will help the prospective buyer identify many more sources for their down payment.
Article By: Tana Hubbard
Evolve Bank & Trust