This is another one of those questions which many of my clients, especially first time home buyers, ask during an initial conversation. There are many reasons why clients ask this, but it usually has to do with either limited funds to put down or a desire to attract the best mortgage terms. And any time this question is asked of me, I respond with, “whatever makes sense for you.”

And I don’t say that to be funny, I say it because there is no right down payment. Different down payments will allow you to take advantage of different mortgage programs. A 3.5% down payment will mean you are going to have access to an FHA loan. A 20% down payment will probably mean you are not using FHA. And everything in between will be dependant upon your personal credit and income. So in order to determine the best down payment, it is important to consider what programs make the most sense for you, how much out of pocket you can really afford, and how much you are comfortable paying monthly.

A client of mine recently purchased a home in Northville. He had a sizable amount of cash available from the sale of his last house, and originally planned on putting 30% down on his new home. After we ran the numbers and he saw the interest rates available in a number of different situations, he decided to only put 10% down and take advantage of a lender paid mortgage insurance option to increase his cash reserves. And while this might seem strange to many, it is not an uncommon situation, and is why it is important to get all the facts before determining how much you will put down on a house.

If you are considering buying a house and would like to determine which lending programs make the most sense for you, please contact me. And if you have anything to add about how much to put down on a house, please leave a message.