by Denis Knox
Typically, the first step to home buying is to start saving for a down payment. A down payment on a home is the amount of cash that you will be able to put toward the house before taking any loans (i.e., a mortgage).
Online financial calculators sometimes ask for the down payment/ prepayment as a percentage. To find out the percentage of your down payment remember the simple percentage rule: multiply your down payment in dollars by 100 (or just add two 0’s) and then divide by the total cost of the house. This will give you your down payment percentage (%).
The larger your down payment is, the less money you will need to borrow to buy the house. (But when figuring out how much cash you should save to purchase a home be sure to save extra on top of the down payment for costs such as earnest money, an inspection, and closing fees!)
There are mortgages programs for people with little or no money for a down payment. For example, in Maine CU Promise Loans and other mortgages offer a number of options for home buyers.
