Michelle Zambrano | January 6, 2022

For many people, the biggest barrier to home ownership is the belief that you need a lot of money to buy a home.

In reality, the amount needed today is less than you would need to rent an apartment, thanks to various new mortgage programs and low interest rates.

The money you need can be broken down into 2 categories: down payment and settlement costs.

The down payment is the amount of money you are paying "out of pocket" on the purchase and sale contract. 

Your down payment will vary depending on which mortgage program you choose.

The three major mortgage programs are:

For example, a $300,000 home would require a down payment of $10,500 for FHA, $0 for VA, or $9,000 for conventional.

Compare this to renting a home where the lease is $2500 monthly. 

In most cases the landlord would want your first and last month's rent, security deposit, plus the realtor's commission. 

That's 4 months rent of $2500 for a grand total of $10,000.

You can expect closing costs for real estate transactions in New York to be about 6% of the purchase price. 

Where you live and when you close will determine exactly how much you will have to pay. 

Your closing costs may include:

You will need to meet with a lender to get a more precise estimate of your closing costs.

It is not necessary to have all the closing costs and down payment available in your bank account.

If you do not have a lot of money available to buy a home, here are some ideas:

Down payment assistance programs can provide up to $100,000 which may be used for closing costs or your down payment.

Program requirements vary by type, terms, and location.

Click the button below to find out if you qualify for down payment assistance. It only takes 45 seconds.