Mortgage Blog

How much money down do I need?

May 24th, 2011 2:43 PM by Michael and Jill Kohler

With my wife and I being both lenders and real estate agents, this is one of the most common questions we hear from potential home buyers and borrowers. The simple answer is a minimum of 3.5 to 5% in cash of the amount of the property you're planning on purchasing. This assumes decent credit (above 620 mid score) 2 years continuous employment, documented income (current paystubs, w-2's) with the total payment (including property/school taxes and insurance) or PITI no more than about 31% of gross monthly income for monthly housing expense. Bear in mind this is a minimum set of criteria. We fund loans through many different wholesale banks and each of those lenders has their own set of underwriting guidelines (and some can be downright picky) If you are planning on applying for a purchase mortgage anytime soon, you may want to speak with a qualified mortgage professional to review your credit, financials, accounts and ratio's to prepare in advance before entering the market and falling in love with your dream home.

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Posted in:General
Posted by Michael and Jill Kohler on May 24th, 2011 2:43 PM

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