At present, at the times of recession banks have started to require down payments – a practice that was popular 10-20 years ago. Even two or three years ago you could apply for a mortgage up to 100% and in some cases even 120% of total property value. But now, when we are facing difficult times almost all banks require you to have at least a small down payment. In fact banks follow certain rules as to how high the down payment ought to be, and so you will need only 3% if you qualify for FHA loan (Federal Housing Administration). As repayment of such loans is guaranteed by the federal government lenders is certain he will not lose money and that is why you need only 3% down payment. You will need from 5% to 10% if you want to borrow less than $417,000 and if your credit score is 720 or lower. One more important thing here is the location of the property, as if it is in a ‘distressed market’ you might e required to have a bit more money.
A bank will require you to have 10% to 15% down payment if you want to buy a property in a distressed market, or you want to borrow more than $417,000.
If you have a credit score lower than 720 or want to borrow a low mote than $417,000 the bank will require you to have 15%-20% down payment.
As you can see there are many variables so you need to make sure what you want and what you can afford prior to applying for a loan in order to get the loan as soon as possible and without unnecessary surprises.