How much can you put down?
It's possible to buy a home with little or no money down. Most experts, however, advise against this.
Your credit score and down payment amount are the two factors with the greatest influence on the kind of mortgage you can secure. Ideally, you want one with a low interest rate and low monthly payments. With good credit, you're halfway there. A downpayment that's at least 20 percent of the house price will get you the rest of the way.
This means that if you're looking at a $180,000 home, you want to have at least $36,000 in the bank set aside for this expenditure. For a $400,000 home, your home-savings account should boast at least 80 grand.
For most of us, that's pretty steep, and there are other options -- less ideal, but still manageable. If you put down less than 20 percent at closing, you'll be paying more each month and you'll have to purchase private mortgage insurance, an extra expenditure in the home-buying process.
Beyond having that 20 percent in the bank, though, experts advise against that chunk of cash being your entire life savings -- especially because you'll probably be paying several thousand in closing costs on top of the money you put down, and some homes can require large repairs early on. If you don't have additional, significant savings on top of that downpayment, you may want to hold off while you build up a better buffer.
Next, obvious but so often misunderstood ...