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FAQs
A 20% down payment on a $300,000 mortgage is $60,000. The $60,000 down payment is what most lenders look for especially commercial lenders, because it helps mitigate the risk of default.
Is a 20% down payment realistic? ›
A 20 percent down payment may be traditional, but it's not mandatory — in fact, according to 2023 data from the National Association of Realtors, the median down payment for U.S. homebuyers was 14 percent of the purchase price, not 20.
How do I calculate my required down payment? ›
In most cases, you need a down payment of at least 3 percent of your target home price. Many loan types and lenders require 5 percent down or more. You can often save money if you put down at least 10 percent of the home price, and you'll save the most if you put down at least 20 percent.
What is the formula for calculating down payment? ›
How do you calculate down payment? Down payment is calculated using the formula: down payment = down payment percent times purchase price. The down payment percent needs to be converted into a decimal for this calculation.
How much house can I afford if I make $70,000 a year? ›
Assuming a 20 percent down payment on a 30-year fixed-rate loan at an interest rate of 7 percent, you can afford the payments on a $240,000 home, according to Bankrate's mortgage calculator.
Is 20k enough to put down on a house? ›
To purchase a $200,000 house, you need a down payment of at least $40,000 (20% of the home price) to avoid PMI on a conventional mortgage. If you're a first-time home buyer, you could save a smaller down payment of $10,000–20,000 (5–10%). But remember, that will drive up your monthly payment with PMI fees.
Is it better to put 5 or 20 down on a house? ›
Since you're assuming more of the financial risk, a 20% down payment puts you in a great spot to negotiate with your lender for a more favorable mortgage rate. A lower interest rate can save you thousands of dollars over the life of the loan.
What credit score do I need to buy a house with no money down? ›
You'll usually need a credit score of at least 640 for the zero-down USDA loan program. VA loans with no money down usually require a minimum credit score of 580 to 620. Low-down-payment mortgages, including conforming loans and FHA loans, also require FICO scores of 580 to 620.
What are the disadvantages of a large down payment? ›
Drawbacks of a Large Down Payment
- You will lose liquidity in your finances. ...
- The money cannot be invested elsewhere. ...
- It is inconvenient if you will not be in the house for long. ...
- If the home loses value, so does your investment. ...
- You might not have the money to begin with.
How much house can I afford $40,000 a year? ›
How much house can I afford on 40K a year?
Annual Salary | $40,000 | $40,000 |
---|
Mortgage Rate | 7.287% | 7.287% |
Home Purchase Budget (25% monthly income on mortgage payments) | $103,800 | $114,900 |
Home Purchase Budget (28% monthly income) | $109,500 | $127,600 |
Home Purchase Budget (36% monthly income) | $141,100 | $159,300 |
4 more rowsMay 10, 2023
You can get a conventional mortgage with 3 percent down, but with anything less than 20 percent, you'll have to pay mortgage insurance.
How much income do I need for a 300K FHA loan? ›
Following the 28/36 rule, you should make roughly triple that amount to comfortably afford the home, which is $72,000 annually. Keep in mind that these calculations do not include the cash you'll need for a down payment and closing costs.
What is the best percentage for a down payment? ›
Typically, mortgage lenders want you to put 20 percent down on a home purchase because it lowers their lending risk. It's also a rule that most programs charge mortgage insurance if you put less than 20 percent down (though some loans avoid this). But it's not a rule that you must put 20 percent down.
What percentage is normal for a down payment? ›
Visit your My NerdWallet Settings page to see all the writers you're following. The median down payment for all home buyers is 15%, according to the National Association of Realtors (NAR). First-time buyers make smaller down payments: They put down a median 8%, compared to 19% for repeat buyers.
What is a typical down payment amount? ›
Average Down Payment by State
State | Median Down Payment | Average Down Payment Percentage |
---|
California | $85,179 | 18.20% |
Colorado | $66,062 | 17.20% |
Connecticut | $43,033 | 15.80% |
Delaware | $36,052 | 15.60% |
47 more rows
How much is a downpayment on a $300000 house? ›
If you're looking to buy a home, you'll need to put down a significant amount of money before closing on a property. Expect to pay between $10,500 and $60,000 as a down payment for a loan of $300,000. While the suggested average down payment for a $300,000 home is 20%, many people put down less than this.
What is a good down payment on a 300k house? ›
A 20% down payment will help you to avoid paying private mortgage insurance (PMI). However, it's still possible and may be preferable for some homebuyers to put down less money up front. A higher credit score can help you qualify for a better interest rate on your mortgage, which can lower your monthly payments.
What credit score is needed for a 300k house? ›
Federal Housing Administration (FHA) loans need at least a 580 FICO Score with at least a 3.5% down payment (which amounts to $10,500 on a $300,000 home). Conventional loans require a minimum FICO® Score of 620 along with a 3% down payment (which amounts to $9,000 on a $300,000 home).
What is the monthly payment on a 300k mortgage? ›
Monthly payments for a $300,000 mortgage
Annual Percentage Rate (APR) | Monthly payment (15-year) | Monthly payment (30-year) |
---|
6.50% | $2,613.32 | $1,896.20 |
6.75% | $2,654.73 | $1,945.79 |
7.00% | $2,696.48 | $1,995.91 |
7.25% | $2,738.59 | $2,046.53 |
5 more rows