How to Calculate a Home Down Payment

Video Transcript

"Calculating a down payment for a home can be a pretty easy process. I'm Richard Blake in Clearwater, Florida. I'm here to explain how to calculate the down payment for a home. The down payment or the cash that you apply towards the purchase of the home is decided by the lender. Generally it's a percentage of the purchase price or the current value of the home. Most lenders do require about 20% to put down but this is going to differentiate according to your financial circumstances. For example, the better credit score you have, the lesser amount of money is going to be required for you to put down. As well as, if you have a higher annual income, you may not need to put as much money down either. Other items such as being a first time home buyer, they're going to have different programs available to you. And quite often, you can actually purchase a home with as little as 5% down. It really just depends on your financial circumstances. I highly advise that you contact your local mortgage broker, get together with them. Bring in your annual income as well as your list of monthly debt and they will be able to do a calculation for you on exactly what you can afford. And at that point in time, they'll let you know what loan programs you are qualified for in order to decipher how much of a down payment is going to be require. But generally, you're going to be looking anywhere between 5 and 20 percent for your down payment."