How Much Should You Put Towards Your Down Payment?

When you are buying a home, one of the first things you will need to do is gather money for a down payment. The down payment on a home mortgage shows the lender that you are financially responsible enough to be a healthy risk. When buying a home, people are often told they should save 20 percent of the purchase price on their home to use as a down payment. This is a good figure, but it’s not the only option.

If you are able to put 20 percent down as your down payment, your home loan is going to be a bit more affordable. Not only will your principal amount be less on your home mortgage, but you will also avoid the private mortgage insurance (PMI) fee. This fee covers the additional risk your lender takes on to loan to you without the 20 percent down. This fee can be canceled once you have reached 20 percent equity in your home.

In the end, your decision about your down payment will depend on your financial condition. If you can put down 20 percent, then do so, but if you need a home and can’t wait to save that much, then don’t. with the help of Avis Lending, you can find a home mortgage that fits your existing financial situation. Give us a call today to learn more.

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