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What Is the Average Down Payment on a House?

If you are planning to buy a house, do you know how much of a down payment is required? The average down payment for a 30-year, fixed-rate purchase is 16.64%, but for many Americans, this is an unattainable amount.

Keep reading for payment suggestions and ways to start saying for your down payment today.

learn about the average down payment for a house

What Is the Minimum Down Payment I Can Make?

While most mortgage lenders require that you put at least 3% down on a house, Federal Housing Administration (FHA) loans require a 3.5% down payment. What does this really mean? A 3% down payment on a $300,000 house is $9,000, and a 3.5% down payment would be $10,500.

The benefit of paying a higher down payment is that it decreases the amount of interest you will pay, lowering your monthly payments.

What Is Mortgage Insurance?

If you can’t afford the minimum down payment or you need a loan, you might have to pay mortgage insurance to protect the lender or title holder in the event that you end up defaulting payments or can no longer pay them.

To avoid paying mortgage insurance, you have to be able to pay 20% or more on your down payment, which is slightly above the average down payment and difficult to pay for most people.

Mortgage insurance includes private mortgage insurance (PMI) or mortgage life insurance and is often required by many loan providers. It may require a lump sum payment or a monthly fee.

figuring out down payment loan options

Down Payment Loan Options

In addition to paying mortgage insurance, other ways to pay a lower down payment include the following:

save for average down payment today

How Can I Save for a Down Payment?

Here are quick and efficient ways to start saving money for a down payment:

Save for a Down Payment with Synchrony Bank

If you want to pay the average down payment on your home, consult with the banking representatives at Synchrony Bank. We offer a variety of savings options, including high yield saving accounts and money market accounts.

Our savings accounts are FDIC-insured up to $250,000, per depositor for each ownership category.

Open an account today or call us at 844-345-5789 to learn more about our savings products.

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Sources:

PR Newswire: https://www.prnewswire.com/news-releases/down-payments-fall-slightly-in-q1-2016-300259347.html

Bankrate: http://www.bankrate.com/finance/mortgages/down-payment-1.aspx

Investopedia: http://www.investopedia.com/terms/m/mortgage-insurance.asp

The Mortgage Reports: https://themortgagereports.com/17861/private-mortgage-insurance-avoid-pmi-mortgage-rates

Investopedia: http://www.investopedia.com/terms/p/privatemortgageinsurance.asp

Bankrate: http://www.bankrate.com/finance/insurance/need-buy-mortgage-life-insurance.aspx

Bankrate: http://www.bankrate.com/finance/mortgages/4-mortgages-that-require-little-money-down-1.aspx


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