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.
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.
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.
In addition to paying mortgage insurance, other ways to pay a lower down payment include the following:
Here are quick and efficient ways to start saving money for a down payment:
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.
PR Newswire: https://www.prnewswire.com/news-releases/down-payments-fall-slightly-in-q1-2016-300259347.html
The Mortgage Reports: https://themortgagereports.com/17861/private-mortgage-insurance-avoid-pmi-mortgage-rates
*ANNUAL PERCENTAGE YIELD (APY): All APYs are accurate as of 07/13/2018.
APYs are subject to change at any time without notice. Offers apply to personal accounts only. Fees may reduce earnings. For Money Market and High Yield Savings Accounts, the rate may change after the account is opened. For CDs, a minimum of $2,000 is required to open a CD and must be deposited in a single transaction. A penalty may be imposed for early withdrawals. After maturity, if you choose to roll over your CD, you will earn the base rate of interest in effect at that time. The APY shown for CDs and IRA CDs is for a 60-month CD with a balance of at least $25,000. Click here for all CD rates and terms offered.