{"id":1224,"date":"2021-04-12T19:00:12","date_gmt":"2021-04-12T19:00:12","guid":{"rendered":"https:\/\/bundleloan.com\/blog\/?p=1224"},"modified":"2021-06-21T18:07:54","modified_gmt":"2021-06-21T18:07:54","slug":"what-is-a-down-payment","status":"publish","type":"post","link":"https:\/\/bundleloan.com\/blog\/what-is-a-down-payment\/","title":{"rendered":"What is a Down Payment?"},"content":{"rendered":"<p>When you buy a home, you\u2019ll typically be required to make a down payment. This is an amount that you must pay up front, the day you buy the house.<\/p>\n<figure id=\"attachment_1236\" aria-describedby=\"caption-attachment-1236\" style=\"width: 1168px\" class=\"wp-caption aligncenter\"><img fetchpriority=\"high\" decoding=\"async\" src=\"https:\/\/bundleloan.com\/blog\/wp-content\/uploads\/2021\/04\/what-is-a-down-payment.png\" alt=\"What is a Down Payment?\" width=\"1168\" height=\"657\" class=\"size-full wp-image-1236\" srcset=\"https:\/\/bundleloan.com\/blog\/wp-content\/uploads\/2021\/04\/what-is-a-down-payment.png 1168w, https:\/\/bundleloan.com\/blog\/wp-content\/uploads\/2021\/04\/what-is-a-down-payment-300x169.png 300w, https:\/\/bundleloan.com\/blog\/wp-content\/uploads\/2021\/04\/what-is-a-down-payment-1024x576.png 1024w, https:\/\/bundleloan.com\/blog\/wp-content\/uploads\/2021\/04\/what-is-a-down-payment-768x432.png 768w\" sizes=\"(max-width: 1168px) 100vw, 1168px\" \/><figcaption id=\"caption-attachment-1236\" class=\"wp-caption-text\">What is a Down Payment?<\/figcaption><\/figure>\n<p>It\u2019s common for people to refer to down payments as a percentage. For example, if you buy a home for $300,000 and make a 10 percent down payment, the amount would be $30,000. That means you\u2019d need a mortgage of $270,000 to cover the remainder of the home price.<\/p>\n<p>20 percent would be $60,000, and you\u2019d need a mortgage of $240,000. And a 5 percent down payment would be $15,000, and you\u2019d need a $285,000 mortgage. For several reasons, the amount of your down payment has a direct impact on the cost of your mortgage. The first one is the most basic.<\/p>\n<p><iframe width=\"560\" height=\"315\" src=\"https:\/\/www.youtube.com\/embed\/kX4qeBtj9gQ?controls=0&#038;rel=0\" title=\"YouTube video player\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><\/p>\n<p>A lower down payment will increase the cost of your mortgage simply because you are borrowing more money to cover the price of the home. A 5 percent interest rate on a $285,000 mortgage results in higher total interest payments than that same rate on a $240,000 mortgage.<\/p>\n<p class=\"tip\">Tip<\/p>\n<p class=\"tip-content\">\nAlso, if you put down less than a 20 percent, you will most likely be required to get <a href=\"https:\/\/www.consumerfinance.gov\/ask-cfpb\/what-is-mortgage-insurance-and-how-does-it-work-en-1953\/\">mortgage insurance<\/a>, which protects the bank in the event you fail to make your payments.\n<\/p>\n<p>Finally, since banks experience higher risk on mortgages with lower down payments, they tend to charge higher interest rates on such mortgages. This is why it&#8217;s important to <a href=\"https:\/\/bundleloan.com\/blog\/compare-current-mortgage-rates\/\">compare current mortgage rates<\/a>.<\/p>\n<p>Bundle has a cool <a href=\"https:\/\/bundleloan.com\/mortgages\/how-much-house-can-i-afford\/quiz\">tool<\/a> that helps you create a down payment target based on your individual situation.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>When you buy a home, you\u2019ll typically be required to make a down payment. This is an amount that you must pay up front, the day you buy the house. It\u2019s common for people to refer to down payments as a percentage. For example, if you buy a home for $300,000 and make a 10 [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What is a Down Payment? - Bundle<\/title>\n<meta name=\"description\" content=\"What is a down payment? A down payment is an amount that you must pay up front, the day you buy the house. This can affect your mortgage rate.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/bundleloan.com\/blog\/what-is-a-down-payment\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is a Down Payment? - Bundle\" \/>\n<meta property=\"og:description\" content=\"What is a down payment? A down payment is an amount that you must pay up front, the day you buy the house. 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