Determine Your Down Payment


Determine How Much You Can Afford to Spend Upfront on a New Home Purchase

  • Gather your savings and investment account statements and add up your available funds.

  • Decide how much you want to set aside for other savings goals, moving costs, and renovations for your new home. Subtract these amounts from your total available funds.

  • Now, subtract an additional amount for an emergency cushion. A good rule of thumb is at least three to six months' worth of expenses.

  • The end result is the maximum available cash for closing – cash for closing includes your down payment, possible closing costs, and inspection fees.

Estimate Your Costs to Close

In addition to your down payment, there are many costs associated with finalizing your loan and home purchase. Closing costs depend on a lot of things – the price of the home, your down payment amount, and the kind of loan you choose.

  • You can make an estimate, using a home price that is typical for the area you are looking to buy in.

  • Typically, closing costs (not including your down payment) range from 1.5-5% of the home purchase price. Using Advanced Funding as your Utah mortgage broker the average is between 1.5-2.5%.

Determine Your Down Payment

Subtract your closing costs estimate from your available funds for closing to determine your maximum down payment.

Plan on Needing Money to Cover Initial Home Expenses

New homeowners often find things that need fixing or discover that they need additional furniture for their new home. Moving expenses and utility set-up fees are also common. When calculating how much you can afford for a down payment, make sure to set aside some money to cover these expenses.


Down Payment Amount Affects the Your Type of Loan and Interest Rate

  • In most cases, you need a down payment of at least 3 percent of the home price. There are programs that may require less of a down payment but will cost you more in closing costs and possibly a higher interest rate.

  • When your mortgage broker determines your interest rate and loan costs, they will look at your down payment in increments of 5 percent. For example, if you have enough saved for a down payment of, say, 8 percent of your home price, think about whether you could save up a little more before buying, or choose a slightly cheaper home, so you can hit the 10 percent mark and receive better loan terms.

Low- Or No-Down Payment Options May Be Available

Give Yourself a Cushion

At this point in the home buying process, the numbers you are working with are estimates. It’s a good idea to give yourself a cushion in your estimates, so you’re not left scrambling for money. You can also explore additional ways to save for your down payment and additional costs.

Advanced Funding Home Mortgage Loans

Your Local Mortgage Company

As a mortgage broker in Utah, we work with several mortgage lenders, enabling us to offer you a variety of Utah mortgages and refinance home loans at the best mortgage rates and lowest fees available. Working with several lenders allows us to offer more home loan options to help you achieve your goals. Whether you're buying a home or refinancing, Advanced Funding is here to help. Our mortgage loan officers are available to help you during regular business hours or a time that is more suitable to your needs. Call today for more information, 801-272-0600.

Experience Matters

As one of the most trusted and respected mortgage companies in Utah, Advanced Funding Home Mortgage Loans offers a variety of purchase mortgage and refinance products. Our licensed mortgage brokers are both knowledgeable and experienced to ensure you a pleasant home loan experience at the best interest rates available. We combine the use of technology, impeccable service, a dynamic management team, along with a well-trained, and experienced staff to produce results, such as great mortgage rates, low fees, and most importantly, a fast and pleasant loan experience.

Advanced Funding Home Mortgage Loans
6589 South 1300 East, Suite 200
Salt Lake City, UT 84121

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