Buying my first home - what's the LEAST I should put down as a down payment?

EthanR answered 4 months ago …

TBone, that is a tough question, because often it depends upon the person's individual circumstances. How much will you have left in savings after making the down payment? How many years is the mortgage? What is the ratio of debt to your income? Are you buying a foreclosure or other type of bargain with equity already built in? Are you comfortable with a higher payment and less money out of pocket, or do you sleep better at night with a lower payment and more out of pocket?

If you put down 20%, then you will eliminate the Private Mortgage Insurance (PMI) payment and get a better interest rate. Ask the lender what the difference in interest rate will be for 20% down vs 10% or less. Also ask how much you would save on PMI. You can go to the link below to see how much your principal and interest payments will be on different loan amounts. If the loan amount will be very small, such as below $80,000, due to a large down payment, you could have to pay a higher interest rate for a low loan amount.

By the way, it is very important to get a Good Faith Estimate (GFE) from the lender at first meeting. If they do not give you one, do not do business with them. Here is the mortgage calculator link:

http://www.daveramsey.com/etc/realestatecenter/dsp_mortgage_calc_swf.cfm