A house is sold for $300 000 and appraised for $285 000. What down payment will...

A house is sold for $300 000 and appraised for $285 000. What down payment will be needed to qualify for a conventional mortgage?

Expert Solution

Conventional home mortgages require down payments of anywhere from 3 to 20 percent of the purchase price.

While a low down payment makes it easier to get into a house, you might have to pay expensive premium mortgage insurance if you don't have at least 20 percent equity in the home.

A conventional loan is a home loan not insured by any of the federal mortgage programs sponsored by the Federal Housing Administration.

Going by the above guidelines

Purchase price = $300,000

Downpayment = 20% of Purchase price

Downpayment amount = 20% * 300,000 = $60,000

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