It has long implied that 20% is the average down payment on a house. With a 20% down payment lenders will see you as a lower risk borrower and this will prevent you from having to pay PMI (Private Mortgage Insurance.)
While there are benefits to having a larger down payment it is not a requirement for buying a home in today’s market. Legacy Mortgage offers loan programs with various down payment options from $0 down with a VA home loan to as little as 3% down with a conventional loan.
What is the Average Down Payment on a House
According to Nerd Wallet, the average down payment on a house in 2024 was 18% with the average for first time home buyers at just 9%.
When you work with a mortgage broker like Legacy Mortgage they will review a variety of loan programs to find the one that will be the best fit for your individual mortgage needs. This evaluation will include the funds you have available for your down payment.
Some of the loan programs available through Legacy Mortgage include:
Conventional Loan – These loans typically have a 20% down payment however with PMI you can put as little as 3% down.
FHA Loan – With a credit score of 580 or higher you can put as little as 3.5% down on an FHA loan.
VA Home Loan – The VA home loan is available to veterans and is designed to offer a zero down payment option.
Jumbo Home Loan – A jumbo loan is a loan higher than the current FHA loan limit of $806,500. A jumbo loan will typically require a down payment of 10% but it could be as high as 30% depending on the lender.
1st Time Homebuyer – Legacy Mortgage has multiple options for first time home buyers including a partnership with New Hampshire Housing to be able to offer down payment assistance.
USDA Loan – There are $0 down payment options available with a USDA loan.
Physician Loan Special – With close proximity to Dartmouth Health, Legacy Mortgage has put together loan opportunities tailored to serve medical professionals relocating to the Upper Valley. There are options for 0%, 3%, 5% and 10% down through the physician loan special.
With a multitude of programs and partners you should be able to find a loan option that best suits your scenario and down payment.
20% Down Payment vs. 3% Down Payment
Some home buyers may have the cash for a larger down payment available to them but they want to evaluate their options to have extra cash to cover costs associated with becoming home owners. There is no question that a larger down payment will lower your monthly payment but it’s important to look at the difference to decide where the cash is best used.
20% Down Payment Purchase scenario:
- Home Price: $500,000
- Down Payment: $100,000
- Loan Amount: $400,000
- Monthly Payment: $3,381.89
3% Down Payment Purchase scenario:
- Home Price: $500,000
- Down Payment: $15,000
- Loan Amount: $485,000
- Monthly Payment: $4,070.62
Saving $688 a month on your monthly payment is huge. However if the home you are buying requires repairs you have to calculate the best use of your cash. The average down payment on a house only matters if that scenario works for you personally. Whatever your individual circumstances may be, your loan officer will work to find you the best scenario for your unique home buying needs to get you into a loan product you’re comfortable with.
The Legacy Mortgage team collectively boasts over a 135 years of industry experience and is well versed in a variety of loan programs including fixed mortgages, ARMs, VA loans, FHA, first time homebuyer and more! We have the privilege of partnering with the best local agents, appraisers and attorneys the Upper Valley has to offer. When you work with Legacy Mortgage you are working with the best local professionals from beginning to end. Reach out to the Legacy Mortgage team to get the loan process started. Call us today, 603-643-7400.