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In this article
- Down Payment
- Down Payment Percentage
- Average Down Payment
- Earnest Money
Ideally, the down payment on any new home purchase should ideally be at least 20%, although recent changes in lending have resulted in lower requirements. It’s always a good idea to consult with your mortgage lender to determine how much you will need to put down. Traditionally, a required down payment amount has ranged between 10% and 20%, but with new loan programs, necessary down payment amounts are changing.
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Down Payment
The down payment amount you’ll need for a $550K house depends on your lender’s requirements as well as your individual circ*mstances. Some people have zero down payment requirements, while others can pay as little as 3% or 5% of the sales price. Putting down the standard 20% can help you avoid paying mortgage insurance and interest and could save you thousands of dollars. So you can expect to pay between $16,500 and $110,000 as a down payment on a $550,000 purchase. Keep in mind, besides the down payment amount, you will also have to factor in closing costs.
Almost all lenders require a down payment. The amount can vary, depending on your income, credit score, and the type of loan program you’re applying for. Banks typically use a Vantage score while FICO scores are used by most other lenders. If you’re unsure which method a particular lender uses, you can contact the lending institution and ask how much of a down payment they expect.
To determine your ideal down payment you must first determine your budget. The best way to calculate how much you can afford each month, review your credit card and bank statements. Based on your findings you should have a good idea of how much home you can afford, this will give you a range of your potential down payment amount. It is important to have a minimum down payment percentage, regardless of the type of loan you’re getting.
Using a closing cost calculator is the best way to determine approximately what you will have to bring to the table on closing day.
Closing Cost Calculator
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Closing Cost DetailsCost Breakdown
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Down Payment / 20%
All information and results provided by this Closing Cost Calculator are estimates only. They will in no way accurately reflect actual closing costs. This calculator is to be used only to establish and estimate of closing costs. There are many unique factors that will affect the actual cost.
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$0Down Payment Percentage
The down payment percentage for a $550K house varies, and is determined by your individual financial situation and mortgage plan. Some people are able to put nothing down, while others will need to put down at least 3%. However, many lenders prefer that you put at least 20% down, which can save you thousands of dollars in mortgage insurance and interest. The percentage that you put down will be based on the type of loan you qualify for. Here is a quick table with different down payment percentages for a $550,000 mortgage.
| Down Payment Percentage | Down Payment Amount |
|---|---|
| 3% | $16,500 |
| 5% | $27,500 |
| 10% | $55,000 |
| 15% | $82,500 |
| 20% | $110,000 |
The Home Buying Institute recommends putting down 20% or more. However, the amount you can afford depends on your financial situation and your location. While you should be prepared to make a down payment that you can afford, you should always have an estimate on hand. A down payment is the most significant expense during the home-buying process. In addition to the down payment, you will have to pay closing costs, such as lender’s title insurance, mortgage points, and an appraisal or survey fee.
Average Down Payment
If you’re looking to buy a home, you’ll definitely need to put down a significant amount of money at closing. While the average down payment for a $550,000 home is 20%, many people put down less than this. The down payment calculator can help you plan your savings and budget to put down the smallest amount possible. In addition, the calculator can help you determine the amount of money you need to save each month.
Saving money for a down payment can be difficult for some, because the average minimum down payment on a $550K house is $16,500 or more, and when you add in the closing costs, that can add up to $36,500 or more. The average monthly mortgage payment with PMI is about $2,850. It’s important to remember that the amount you’ll need to put down will depend on your credit score, your debt-to-income ratio, the type of mortgage, the interest rate and the length of time you’ll be in the house.
Earnest Money
Earnest money is a way to show a seller that you are serious about purchasing their home. It is usually an amount between 1% and 3% of the agreed upon purchase price. So for a purchase price of $550,000 you could expect to put down between $5,500 and $16,500. The agreed upon amount is then placed in an escrow account until the purchase is finalized. Once the purchase goes through and during the closing process the funds will be released and will be applied towards your down payment. So remember to factor this in when thinking about how much down payment you think you can afford.
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