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How To Budget for a New Home Down Payment

Posted: June 26, 2020

Budget for a New Home Down Payment

First-time homebuyers typically begin the purchase process with one question: Can I afford the deposit and down payment? There’s no single way to map your finances toward a home purchase – a few useful tips include backtracking from your down payment, preparing for future expenses beyond your initial expense, and working with a trusted lender.

Most lenders will recommend a down payment of about 20% of the home’s full price, though the percentage can range from 5%-25%. It is essential to calculate a realistic figure early and stick to it. Once this amount feels like a manageable cash expense for you, you’ll want to start mapping out the maximum combined cost of your down payment, mortgage, and interest so that you can align upcoming expenses with your sources of cash flow. Can your monthly income support your recurring costs? If so, you are on the path to homeownership!

When you are ready to meet with a lender, bring your concrete budget plans and a credit report. Lenders will help you determine the best down payment and mortgage rates for you, and they’ll be on the lookout for loan options. Our preferred lenders are here.

Our team of Online Sales Counselors is here to help if you have questions in the early stages. Get in touch today!