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How Much Is an Average Down Payment on a House? According to a recent survey, the average down payment for a home was **between $10,000 and $15,000**, or about 5 percent-6 percent of the total purchase price for a typical US home, according to thelendersnetwork.com.

The average down payment in America is equal to about **6% of the borrower's loan value**. However, it's possible to buy a home with as little as 3% down depending on your loan type and credit score. You may even be able to buy a home with no money down if you qualify for a USDA loan or a VA loan.

Example. If the home price is $500,000, a **20%** down payment is equal to $100,000, resulting in a total mortgage amount of $400,000 ($500,000 - $100,000). The average down payment in the US is about 6% of the home value.

**Typically, mortgage lenders want you to put 20 percent down on a home purchase because it lowers their lending risk**. It's also a “rule” that most programs charge mortgage insurance if you put less than 20 percent down (though some loans avoid this).

If you make $3,000 a month ($36,000 a year), your DTI with an FHA loan should be no more than $1,290 ($3,000 x 0.43) — which means you can afford a house with a monthly payment that is **no more than $900 ($3,000 x 0.31)**. FHA loans typically allow for a lower down payment and credit score if certain requirements are met.

Mortgage amount: $200,000 — This example assumes you have no other debts or monthly obligations beyond your new housing costs, a **20%** down payment, and a good credit score. With that down payment, your $200,000 mortgage would buy you a home worth $250,000. Salary: $94,000 per year.

To purchase a $300K house, you may need to make **between $50,000 and $74,500 a year**. This is a rule of thumb, and the specific salary will vary depending on your credit score, debt-to-income ratio, the type of home loan, loan term, and mortgage rate.

You'll typically need **at least 3 percent of the purchase price of the home as a down payment**. Keep in mind that you'll need to put at least 20 percent down to avoid having to pay for mortgage insurance, however. Don't let the mortgage insurance cost scare you, though.

For starters, **you will need to have $10,000, which you will use for your down payment** and to cover the cost of your home inspection, the appraisal and a year's worth of homeowner's insurance. All of those other closing costs, escrows and everything else will get paid, but not by you.

– Data from the Federal Reserve shows that the average American saves only **6% of his or her disposable income**. Assuming he or she earns the median household income, 6% would be roughly $300 per month, enough to buy a $100,000 home by 35 if he or she started saving at 28.

Conventional Loan Requirements

It's recommended you have a credit score of **620 or higher** when you apply for a conventional loan. If your score is below 620, lenders either won't be able to approve your loan or may be required to offer you a higher interest rate, which can result in higher monthly payments.

While buyers may still need to pay down debt, save up cash and qualify for a mortgage, the bottom line is that **buying a home on a middle-class salary is still possible — in some places**. Below, check out 15 cities where you can become a homeowner while earning $40,000 a year or less.

Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; **670 to 739** are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.

Monthly payments on a $200,000 mortgage

At a 4% fixed interest rate, your monthly mortgage payment on a 30-year mortgage might total **$954.83 a month**, while a 15-year might cost $1,479.38 a month.

So, for this example you would type **=PMT(.** **05/12,60,200000)**. The formula will return $3,774. That's the monthly payment you need to make if you want to pay off your home mortgage of $200,000 at 5% over five years.

Based on a standard work week of 40 hours, a full-time employee works 2,080 hours per year (40 hours a week x 52 weeks a year). So if an employee earns $40,000 annually working 40 hours a week, they make about **$19.23 an hour** (40,000 divided by 2,080).

What is this? In the US, an annual salary **between $70,000 – $78,000 before tax ($5,800 – $6,500 monthly)** is considered to be a good wage in any state.

If you were to use the 28% rule, you could afford a **monthly mortgage payment of $700 a month** on a yearly income of $30,000. Another guideline to follow is your home should cost no more than 2.5 to 3 times your yearly salary, which means if you make $30,000 a year, your maximum budget should be $90,000.

How Much Should I Save If I Am a New Homeowner? Many financial experts suggest that new homeowners should be aiming to save **at least six to 12 months' worth of expenses** in liquid savings account for rainy days.

To find out how much car you can afford with this 36% rule, simply multiply your family's income by 0.36. So if you earn $100,000, for example, you could afford to take out a car loan of **up to $36,000** — assuming you don't have any other debt.

If you're single and make $35,000 a year, then you can probably afford only **about a $105,000** home.

While you don't need a perfect 850 credit score to get the best mortgage rates, there are general credit score requirements you will need to meet in order to take out a mortgage. Prospective home buyers should aim to have credit scores of **760 or greater** to qualify for the best interest rates on mortgages.

**700 is a good score** — and with a little effort, you should be able to find a mortgage lender who will give you a competitive rate and get you into the home you want.