3 Answers

By Kiplinger's Personal Finance Magazine

Lenders are making it a lot easier to buy a house without the traditional 20% down payment, but you're going to pay a lot for that option. If you borrow more than 80% of the home's value, you'll usually have to pay private mortgage insurance, which protects the lender if you default on your loan. That tends to cost 0.5% to 1% of the loan value, up to $3,500 per year on a $350,000 home, or $5,000 on a $500,000 home. It's money that doesn't go toward your principal or interest.

Another option is to piggyback two loans. If you take out one loan for 80% of the cost and another for 20% (or for 15% and pay 5% in a down payment), you can avoid private mortgage insurance. The interest on both loans is generally tax deductible, but the rates on that second loan are quite high -- now running in the low- to mid-9% range.

If you wait to amass the 20% down payment, you can avoid these extra costs, qualify for a lower-rate loan and keep your mortgage payments much lower, which gives you a lot more flexibility in the future.

20% of $250,000 is $50,000

I do not know but I too woud love a home of my own although I think my goals for pricing is lower than yours. Good luck & May God Bless.

FROM WHAT I UNDERSTAND I THINK USEALLY THAY ASK FOR 10 PERCENT DOWN, SO IN YOUR CASE IT WOULD BE $25,000. BUT WITH TODAYS ECONEMY THAT COULD CHANGE, BUT THATS THE RULE OF THUMB I WAS TAUGHT.