Before setting off on your search for a new condo, you’ll need an idea of how much to save for a down payment. Here is what you can expect for the typical condo down payment.
Condo Down Payments Explained
Typical Percentages for Condo Down Payments
There are a lot of young homebuyers right now averaging between 5% and 10% down as a down payment.
In certain cases with first time homebuyers, individuals are even able to put down as low as 3% on their first home.
For first time buyers, using this percentage estimation based off of asking price is a great place to start. If you can afford to put between 5% and 10% down on your first home, odds are there is a mortgage out there you can afford.
One thing to keep in mind in a competitive housing market is that the more you are able to put down for your initial down payment, the more competitive you may be in a multiple offer scenario.
Putting Down Less Than 20% for a Condo Down Payment
Although first time buyers may be approved for mortgages with these initial down payments, it is not always the best choice for buyers to purchase a property when they can only put a small amount of money down.
Whenever your down payment is below 20% of the price of the home, you will also need to purchase private mortgage insurance, or PMI.
PMI is used by the lender as insurance if you stop making payments on your mortgage. This can be added on to your closing costs in the form of a monthly payment or a lump sum payment up front.
If you can afford to put 20% down on a property, then you may be saving in the long run by avoiding additional costs from PMI.
Veteran Benefits for Condo Down Payments
One category that also changes your status in regards to down payment, is your veteran status.
If you’ve served in the military in the United States, you qualify for special veteran home buying mortgages that allow you to put 0% down and just pay the closing costs. This is an excellent benefit for our armed service veterans.
If you have experience serving in the military, definitely check out programs specialized for you!
Saving up for a down payment can be intimidating, but it’s something every first time home buyer goes through! Our team of experienced real estate experts have plenty of lender connections to help you find out what option may be best for you and your budget when figuring out what you can afford for a condo down payment.
Connect us today to get started!
