Down Payment And Closing Costs On Home Purchase Two costs home buyers need to consider when purchasing a new home is the down payment and closing costs. Depending on the mortgage loan program, there is a minimum down payment required.
- For example, for an FHA insured mortgage loan, the minimum down payment required is 3.5% down payment
- The minimum required for a conventional loan for an owner-occupied primary residence is 5% down payment
- The minimum down payment required for a second and/or vacation home is 10% down payment
- The minimum down payment required for an investment home mortgage loan is 20% down payment
- The minimum down payment required for a condotel unit mortgage loan is 25%
- Both VA loans and USDA loans do not require any money down
- Besides the down payment, all home buyers will need to pay closing costs
- Closing costs are costs associated with the purchase and finance of the subject property
- Examples of closing costs are discount points, appraisal fees, title charges, transfer fees, county and state fees, insurance, and other fees associated with the home purchase
- Closing costs vary from county to county and state to state. In general, closing costs can average 2% of the home purchase price
-,Down payment and closing costs are costs associated with the home purchase
- The down payment is mandatory and the earnest money can be used as part of the down payment
- Closing costs can be avoided if the home buyer can get a sellers concession towards the home buyers closing costs
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