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Homebuyers Beware: Who’s Ripping You Off Now?—What You Must Know About the New Rules of Mortgage and Credit by Carolyn Warren

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11. Choose the Right Loan for YOU

This important chapter helps you with the basics: how to choose the right loan for your situation.

How Much Down Payment Is Required?

With the down payment, you are paying money up front toward your purchase to make your loan less than the purchase price. The down payment is the collateral for the lender; the larger your down payment, the less likely you are to walk away without paying, and that creates security for the lender.

• VA loan for U.S. Veterans: 0 down.

• FHA loan for your primary residence: 3.5 percent (of the purchase price) down.

• Conventional loan for your primary residence: probably 10 percent down.

(If the county is considered to be in an area of declining values, you need 10 percent down. ...

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