 How large of a down-payment will I need? |
 In most loan programs, at least a portion of the down payment must come from your own funds. This demonstrates to the lender that your home is an investment that is important to you. For example, if the loan program you select requires a 5% down payment and the purchase price on your home is $100,000, your down payment will be $5,000. However, you may only have to provide a 3% down payment from your own funds, totaling $3,000. The remaining 2%, or $2,000, can be a gift or grant. Some people contribute to their down payment by borrowing against the equity in their profit sharing or 401(k) plans or borrowing against an asset. Federal Housing Administration (FHA) loans are an exception since the entire down payment may be a gift, and Department of Veterans Affairs (VA) loans require no down payment for qualified members and veterans of the armed forces or their widows.
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