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There's a lot to consider before you apply for a mortgage—from evaluating your savings to deciding what you can afford every month. We'll help you start planning by answering your mortgage questions.
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.
Down payments can vary, but they typically range from 3.5 to 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 Opportunities Within Neighborhoods (OWN), Citi's own lending initiative.
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.
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.
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:
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.
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.
Closing costs usually make up around 3% 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.
Closing costs usually make up around 3% of the total cost of your home. Be sure to have some funds to cover those as well.
In a competitive market, getting a SureStart® Pre-approval from Citi lets sellers know you're serious about buying so you can act fast.
Ready to apply for SureStart Pre-approval now?
SureStart® 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. This offer is not a commitment to lend and is subject to change without notice. There is no charge to receive a SureStart pre-approval. However, standard application and commitment fees will apply for the mortgage loan application.