What Does It Mean To Make A “Down payment?”
When you buy a home, you have the option of paying for it with cash from your bank account or with money you have borrowed from a bank. The monies you pay from your own bank account is known as your “down payment.”
As an example, if you purchased a home for $100,000 and wanted to make a ten percent down payment, at closing, the bank would have $90,000 for you while the remaining $10,000 would be sourced from your savings.
How Much Downpayment Is Required To Buy A Home?
FHA loans require a down payment of 3.5% of a home’s purchase price, at minimum. FHA loans are common among first-time home buyers because the program allows for below-average credit scores and there are no special qualifications. FHA mortgage approval standards are considered to be the most-friendly toward first-time buyers.