What's Your Down Payment?

If you're wondering what percentage of what you're paying for a house should be your down payment, know that there's no single best amount, and it will likely vary according to your situation. Mortgage lenders typically like to have you pay 20% or more down (which means you're only financing 80% of your purchase price), but some special loan plans can get that down payment into the low single digits. By using private mortgage insurance, you can also swing a down payment that's less than 20% of your home's purchase price. In addition, there are some programs available that offer low-cost loans with very small down payments. And finally, there are some not-necessarily-good-for-you kinds of mortgages that you should learn about.

If you're fairly flush with funds at the moment, and you work in a profession where you never know exactly how much you'll make in any given year, you might consider paying more than 20% as a down payment. The higher the down payment, the lower your mortgage loan and, therefore, the lower your monthly payments.

Of course, it's also reasonable to pay only as much as you need to, and invest the rest. It's up to you. Just remember that you need to be comfortable with the amount you're putting down and with your monthly payments.

You'll find more home-buying tips in our Buying a Home area. In addition, drop by our Buying or Selling a Home discussion board.

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