Car Credit Requirements
Compare detailed loan scenarios based on your specific needs, including purchase price, down payment, loan term and credit score. Get started now
What is the minimum down payment for conventional, Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) loans?
Interest rates are affected by the financial markets and can change daily or even several times in the same day. The changes are due to many different economic indicators in the financial markets. View our current interest rates.
Mortgage interest rates may change many times each day. Choosing when to lock in your interest rate is an important part of the home financing process. Learn more about interest rate lock options.
Monthly Payment Calculator
In general, lenders express down payments in percentages. For example, a 20% down payment on a $200,000 mortgage loan means you’ll pay $40,000 when you close on your loan.
The idea of a 20% down payment may make buying a home seem unrealistic, but very few lenders still require 20% at closing. In fact, you can get a conventional mortgage, the most common type of loan, with a down payment of as little as 3%.
To see how a down payment affects your monthly mortgage payment, you can use a mortgage calculator. You’ll type in some basic information to get an approximate monthly payment, and you can use down payments of different amounts to figure out which is your best option.
Even if the down payment is not 20%, you can request that your lender cancel the PMI once you have reached 20% of the equity in your home. In most cases, lenders will automatically cancel PMI once you have reached at least 22% of your home’s equity.
How to find out if I qualify for a home
Since the beginning of 2012, home values have risen nearly 30 percent across the country. Unfortunately, rents are rising just as fast. In many U.S. markets, it is now cheaper to own a home than to rent, which is one of the reasons first-time homebuyers account for 30 percent of home purchases today.
Below is a presentation of seven popular loans available to current first-time homebuyers and repeat buyers. Each is usually available with rates that can be previewed online, at any time.
FHA loans allow for a 3.5 percent down payment. Insured by the Federal Housing Administration (FHA), these loans are among the most flexible and forgiving for today’s homebuyers.
FHA loans require mortgage insurance premiums (MIP), but in January 2015 those FHA MIP costs were reduced to allow FHA loans to remain affordable for buyers using the program.
Personal Loan Calculator
“My wife asked her cousin, who is in the mortgage business, about refinancing, but he told her that if it didn’t save us more than a percentage point, it wasn’t worth it,” says Eddie Vera, who is paying 3.5% on the mortgage he has had since 2017. “I also have a friend who went through the process and didn’t find it worth the headache.”
Those concerns have merit, McBride says. The costs can be high. Banks charge a fee for granting new mortgages at a lower interest rate that is typically 2% to 5% of the loan. While that can add up to thousands of dollars, the rule of thumb is to compare that amount to what you’ll save by refinancing. If the savings is greater than the fees (which depends on how long you plan to stay in your home), then it’s worth doing.
Also, the process can be time-consuming, especially since the pandemic work-from-home rules create logistical bottlenecks that can disrupt effective communication between lenders, borrowers and other key players in the process. In addition to these concerns, distrust in the refinance industry may prevent some borrowers, especially those in the Black and Latino communities, from taking advantage of potential savings.