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How to Calculate How Much is Needed for a Down Payment on a House

by Jann Seal

Sharpen your math skills when trying to calculate how much you have to save in order to make a down payment on a house. The scenarios are as various as there are mortgage loans, and factors such as income and credit worthiness are calculated before a total down payment figure is achieved. In addition to a down payment, closing costs fees must be covered, adding another 1 to 2 percent to the cash total needed at closing. Meet with several lenders to research the various loan programs you qualify for and their corresponding down payment.

Pay a down payment of 3½ percent if you qualify for a Federal Housing Administration ( FHA) loan with a credit score of at least 580. All percentages are based on the home's selling price. For example, if the purchase price is $200,000, you need a $7,500 down payment. If you're credit score is under 580, a 10 percent down payment, or $20,000, is required. Pay monthly mortgage insurance for the life of the loan with down payments of less than 20 percent.

Pay the required 3 percent down payment if you qualify for the Conventional 97 loan through conventional lenders. The 3 percent down payment is calculated on the lesser of the home's appraised value or the purchase price. For example, if the home you are purchasing was appraised at $200,000, the down payment will be $6,000. However, if you are purchasing it for $180,000 it will be $5,400.

Pay a minimum of 5 percent of the purchase price as a down payment when applying for a conventional loan. A $250,000 home requires a $12,500 down payment with a conventional loan. Maintain a credit score above 700. Receive the most favorable down payment and interest rates with a credit score above 755. Condominium properties may require higher down payments, especially if they are not in an FHA-approved building.

Pay no down payment and no mortgage insurance if you qualify for a loan through the United States Department of Veterans Affairs, known as a VA loan. To qualify, you must have served or be currently serving in the United States Armed Forces, be credit worthy and hold a score of 620 or above. Pay a funding fee, calculated as a percentage of the total loan amount, at closing. The fee is highest for borrowers who make no down payment or less than a 5 percent down payment. This fee is paid separately at closing if arrangements to have it rolled into the mortgage have not been made. Shop for your VA loan as providers and their costs vary.

About the Author

Jann Seal is published in magazines throughout the country and is noted for her design and decor articles and celebrity *in-home* interviews. An English degree from the University of Maryland and extensive travels and relocations to other countries have added to her decorating insight.

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