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For a home price of $250,000 the minimum down payment would be **$8,750**.

For example, if a mortgage lender requires a 3 percent down payment on a $250,000 home, the homebuyer must pay **at least $7,500** at closing.

As an example, for a $250,000 home, a down payment of 3.5% is **$8,750**, while 20% is $50,000.

Conventional mortgages, like the traditional 30-year fixed rate mortgage, usually require at least a **5%** down payment. If you're buying a home for $200,000, in this case, you'll need $10,000 to secure a home loan.

Pros. A **20%** down payment is widely considered the ideal down payment amount for most loan types and lenders. If you're able to put 20% down on your home, you'll reap a few key benefits.

**The more money you put down, the better**. Your monthly mortgage payment will be lower because you're financing less of the home's purchase price, and you can possibly get a lower mortgage rate.

**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).

For example, a 20% down payment on a $200,000 house is **$40,000**.

**It's definitely possible to buy a house on a $50K salary**. For many borrowers, low-down-payment loans and down payment assistance programs are putting homeownership within reach. But everyone's budget is different. Even people who make the same annual salary can have different price ranges when they shop for a new home.

You'll also need closing costs and other fees, which typically run between 2 and 5% of the purchase price. **Assuming $10,000 in closing costs, you need $25,000 minimum to position yourself for home ownership.**

**If you make $72,000 a year (the income of the average first-time homebuyer), that's nearly $30,000 you'll have ready for a down payment, closing costs and moving expenses.**

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.

A conventional loan requires a credit score of at least 620, but it's ideal to have a score of **740 or above**, which could allow you to make a lower down payment, get a more attractive interest rate and save on private mortgage insurance.

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.

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.

For example, if you're bringing in $175,000 a year, have relatively low monthly debt payments of $1,000 a month and have saved up $100,000 for a down payment, you can afford to spend **$754,916.73** on a home.

On a $350,000, 30-year mortgage with a 3% APR, you can expect a monthly payment of **$1,264.81**, not including taxes and interest (these vary by location and property, so they can't be calculated without more detail).

When attempting to determine how much mortgage you can afford, a general guideline is to multiply your income by at least 2.5 or 3 to get an idea of the maximum housing price you can afford. If you earn approximately $100,000, the maximum price you would be able to afford would be **roughly $300,000**.

A $150,000 30-year mortgage with a 4% interest rate comes with about a **$716 monthly payment**. The exact costs will depend on your loan's term and other details.

Our outlook continues to be that **if you are ready and able to build then now is the best time to do it**. It is anticipated that interest rates will be on a rising trend throughout 2022 and costs will continue to increase, although the cost increases will be at a more normalized rate.

As a result, **consumers today are no longer required to put 20% down for a house** — in fact, some mortgage lenders actually allow down payments as low as 3%. For example, the DreaMaker℠ loan from Chase Bank lets homebuyers put down just 3% of the home's price, as does the HomeReady loan from Ally Bank.

To summarize

The difference between putting down 20% versus 5% is obvious. The amount of interest and private mortgage insurance you save is significant. **The difference between a 5% down payment and 10% down payment becomes less significant**. Going into home ownership with a solid savings balance is necessary.

Research the market, know your budget, and make sure you have all the information you need to make a winning offer. Most importantly, **get pre-approved for financing**. Your offer will look a lot better to the seller with proof in-hand that you can afford the home.