Down Payment Considerations
When learning about the various mortgage products available you'll see the majority will require a down payment percentage of the loan amount. The down payment is cash up front toward the total loan amount and shows the lender that you're serious about repayment and that you have the financial means to acquire the down payment.
Down payments on a mortgage in most cases will vary from 3% - 10% and it is important to consider where the money will come from for your down payment. The money can come from personal savings, stocks, bonds, insurance policies with cash value, as well as equity from other assets such as your current home if you're a homeowner.
No Money Down
There are loan products that require no money down and one of these options may be correct for you but that will be discussed with your lender in the pre-qualification process.
Gifted Down Payment
Some down payments can be “gifted” where you can receive the down payment from a relative in the form of a one time gift. There are rules surrounding a gift for down payment and again your mortgage lender is best suited to explain this to you. There are even programs that combine the concept of “gifting” a down payment and financing it into the loan resulting in a no money down situation.