So you need a down payment calculator to figure out how much money you need to buy your first home! On this page just below, you'll find a helpful little calculator that can assist you in figuring how much money you need to save each month for a mortgage down payment.
It's real simple to use and can be used to figure your monthly budget as you reach for your long term goal for that down payment and home ownership.
Chances are you have a small savings account already started. That's great, now we need to set some longer term goals of saving money. As you look at the first box in the calculator you see a place for a number called the "Savings Goal". This is the first number you need to know.Want to see if you qualify for a mortgage? Click here to find out.
But maybe you wonder how to figure how much money you need to save for a mortgage down payment? The answer to this question depends on what type of a mortgage loan you are planning on getting. Down payment requirements vary from one loan program to another. The short answer is 3%-10% for most first time home buyers.
Of course, depending on where you live, there could be some down payment assistance programs available to you. Visit the section in our website that discusses that topic. You'll find information for each state with live links to sources.
Many people that visit this site are likely to get an FHA home loan so I'll use that as an example. FHA has minimum credit scores. You need a score of 580 or higher to qualify for the 3.5% mortgage down payment. If your scores are lower (500-579) then you may need at least 10% down.
So take the sales price of your new home, let's say it's $100,000, you would need anywhere from $3,500 to $10,000. I think you get the idea.
In the second box, enter the current amount of your savings account. The third box requires the annual percentage rate of your savings account. You should find this number on your bank account savings statement.
Last you enter the number of years you estimate it will take before you buy a home.
When you click the orange "Compute" button, it enters the figures in the remaining three boxes below the buttons.
So, using this down payment calculator you now have some ideas of where your going. Box number 5 tells you the future value of your current savings based on the amount you have already saved and the APR of your savings account.
Box number six tells you the "Savings Gap" or this is the amount you need to save to get to your ultimate savings goal.
The last box, or box number seven is how much money you need to save each month to reach the mortgage down payment goal you set for yourself. So hopefully now you can see that by using this handy little down payment calculator you can budget your savings.
Be sure to check out our other calculators for ideas as you work toward home ownership.
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