Saving for your down payment

A down payment is a large initial payment toward the cost of the home. Most lenders require one.

Down payments can vary based on the type of mortgage but they typically range from 3.5 to 20% of the purchase price. The larger the down payment, the less you'll need to borrow.

How much of a down payment do you need?

The standard down payment amount is 20% of the home's purchase price. For example, if you buy a house for $100,000 a 20% down payment would require you to put down $20,000 and obtain a loan for $80,000. Your down payment does not include closing costs.

Putting down less than 20%?

Mortgage insurance: Your lender will likely require you to pay mortgage insurance if your down payment is less than 20%. Mortgage insurance protects lenders against nonpayment or default and would be included in your monthly payment.

Other mortgage options: Even if you've saved less than 20% for a down payment, you could qualify for other mortgage options, including FHA loans, VA home loans or HomeRun mortgages.

Learn about additional mortgage options

Setting up a savings account

Whether you're planning on buying a home right now or further down the road, it's never too late to start saving. It's a good idea to set up a separate savings account for your down payment. You'll be less tempted to spend it if it's away from your other funds.

Here are some tips to help you save money each month towards your down payment.

• Set up a predetermined amount to be automatically transferred into your savings account each month.
• Cut back on luxuries such as expensive meals and transfer these savings to your account.

If you have any questions or would like us to walk you through the various mortgage options, call 1-800-248-4638 to talk to one of our experienced mortgage representatives.

Setting a budget

When you're thinking about how much home you can afford, remember that a monthly mortgage payment won't be your only new expense. Your new home will add other costs to your budget, such as:

• Utilities
• Taxes
• Insurance
• HOA or condo fees
• Maintenance costs

Our affordability calculator can help you set a budget based on your down payment, income and expenses so you can feel confident about how much you're spending.

How much can you afford?

As you're thinking about how much you can comfortably afford every month, it helps to understand monthly mortgage payments. See what makes up a payment, how you could lower yours or even raise it to pay off your loan faster.

How do payments work?

What affects your rates?

Mortgage closing costs

Closing costs usually make up around 1-4% of the total cost of your home. They aren't included in the down payment, so you should be sure to have some funds to cover those as well. After submitting your loan application you'll receive a Loan Estimate itemizing your closing costs so you can plan and save accordingly.

What types of costs should you expect?

Getting a mortgage pre-approval

In a competitive market, getting a SureStart® Pre-approval from Citi lets sellers know you're serious about buying so you can act fast.

Find out how a SureStart® Pre-approval can help your chances of getting the home you want.

Terms, conditions and fees for accounts, programs, products and services are subject to change. This is not a commitment to lend. All loans are subject to credit and property approval. Certain restrictions may apply on all programs.

SureStart® Pre-approval is a registered service mark of Citigroup Inc. Final commitment is subject to verification of information, receipt of a satisfactory sales contract on the home you wish to purchase, appraisal and title report, and meeting our customary closing conditions. There is no charge to receive a SureStart® Pre-approval. However, standard application and commitment fees will apply for the mortgage loan application.