I heard you have to put down at least 20 percent as a down payment now. Is that true?
Not necessarily. Certain lenders, like FHA loan programs, still require as little as 3 to 5 percent down. Just keep in mind that to qualify for a lower down payment, you’ll likely be required to buy mortgage insurance, which is tacked onto your monthly payment (to protect the lender in case you default on your loan). But there's another catch...
The other catch is, it’s harder than ever to qualify for a bigger mortgage (and the less you put down, the larger your mortgage will be). If you do put down 20 percent, which is a big chunk of change up front, make sure that you also have a cushion of six months’ worth of mortgage payments to make sure you’ll be covered.
Nestpert Joseph Russo, Executive Director of The National Council for Financial Literacy and Real Estate Expert at ITeachAboutMoney.com
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