How much money will you need for a downpayment and closing costs to purchase a home?
Lenders usually expect you to be able to make a downpayment of at least five percent of the house’s price and to pay closing costs, which are often three to four percent of the loan amount. If you make a downpayment as little as five to twenty percent, the lender will require you to pay for private mortgage insurance. If you make a downpayment over twenty percent, you will not be required to pay for private mortgage insurance. (Requirements for VA or FHA loans may differ.) Under the Federal Real Estate Settlement Procedures Act, the lender must provide you with information on known and estimated closing costs.
