What Is a Down Payment? - Total Mortgage Blog

Abstract

What Is a Down Payment? When it comes to real estate, a down payment is a lump-sum amount paid by the homebuyer. How Is the Down Payment Amount Determined? The size of a homebuyer's down payment requirement varies based on the type of mortgage for which they qualify. Below is a breakdown of the different kinds of mortgage products and the down payments associated with them: An FHA loan, which is one backed by the Federal Housing Administration, requires a down payment of at least 3.5% of the property's appraisal value. What Is a Good Down Payment Amount? You are probably wondering what a good amount for a down payment would be. To answer the question of what a good amount for a down payment would be and more, let's break it down further: Good down payment on a house: This is subjective and should be the best down payment you can afford to make. Minimum down payment on a house: As described above, the minimum down payment varies based on the loan type. Average down payment on a house: According to an American Family Insurance survey, the average size of a down payment ranges between $10,000 and $15,000, which is approximately 5-6% of the property's purchase price.