What you should know about the market
Many lenders currently require down payments of 20 percent or more. One benefit of larger down payments is that the borrower owes less money and usually receives better terms on the mortgage loan. If the down payment is less than 20 percent, most lenders require the borrower to purchase private mortgage insurance, depending on the nature of the loan.
Borrowers can determine the down payment required by the lender as part of the pre-approval process. The pre-approval process is typically a free service where a lender evaluates the borrowers’ financial situation and determines the terms of the loan it is willing to offer. Most housing experts recommend that borrowers get pre-approved prior to searching for a home.