How much do I need for a down payment?

A down payment is the out-of-pocket, upfront payment you make when you buy a new home. Typically, down payments are 3-20% of the home's purchase price, but first-time homebuyers, on average, put down 7%. 

A Key Example

There are two different ways to calculate your down payment: multiplying your desired purchase price by the percentage you want to put down or dividing the amount you've saved for a down payment by the purchase.

• Multiplying: Say you've liked homes in the $200,000 range and want to estimate how much you'd need for the down payment. For a 7% down payment, you'd need $14,000 (200,000 x 0.007= 14,000).
• Dividing: Now, imagine you already have $10,000 saved for a down payment and want to know what percentage down that would be. For a $200,000 home, you'd be able to offer 5% down (10,000 / 200,000 = 0.05). If the home is $250,000, you'd have a 4% down payment. 

Know Your Options

As a first-time homebuyer, you may have access to programs that make buying your first home more achievable. Several states and cities have their own down payment assistance programs. At the federal level, programs exist for low-income, military, rural, and other populations that may reduce your down payment expenses significantly. Our Isabella Bank team can help you determine which financing options you're eligible for.