What about the Down Payment?


A common question and misunderstood aspect of the real estate transaction is Down Payment. Standard down payments range from zero for a Veteran to 20% for a typical conventional loan and everything in-between. A major difference, is that the loans with less than 20% down have PMI (Private Mortgage Insurance), that traditionally runs 7/10 of one percent of the loan amount per year. To translate: A 200k loan at 1% would be $2,000 x 7/10 of that divided by 12 would be $116.00 a month. This private MI (Mortgage Insurance) enables lenders to loan to homebuyers without having to put 20% down (It protects the lenders from loss). One additional item on MI, FHA requires 1.5% of the loan amount, is added to the closing costs.
The typical down payment for the first time home buyer is 3–10% of the sales price.
The foregoing is a great reason to have a good honest Realtor® and a honest lender. It will take the anxiety and guesswork out of home buying or selling. A good Realtor® and Lender can guide you each step of the way towards home ownership or successful sale of your home.

If I can answer any additional questions about down payments or any other topic, or help you get Pre–Approved, give me a call or e–mail:

larry@robertsonrealtor.com or Call: 909.983.2892

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