Besides a down payment, remember that you will also need money for closing costs and home owner's insurance. Most lenders will want to see that your home owner's insurance has been paid for one full year.

Can you afford to make a 20% down payment? If so, you can avoid private mortgage insurance or higher rate combination second mortgages. 20% down tells the lender that you are serious about your new home purchase and puts you in the position to obtain the most favorable interest rates and financing incentives. If a twenty percent down payment is not an option for you a smaller down payment, such as 10% or 5%, can make a big difference in monthly payment.

The amount of money you put down will be determined by each buyer's situation. The buyer may be short on cash reserves or have an abundance of cash. The interest rate on the borrower's loan may be low enough to where instead of using cash for a down payment he/she would be better off to invest it at a higher rate. The amount of money you put down will be determined by your loan program and your economic situation.

There are many loan programs advertising that no down payment is required. However, making some down payment will help lower your interest significantly. If you cannot afford to make a 20% down payment, consider making at least 5% down payment. You will be surprised how much money you can save in the monthly payment.

Your current financial situation and your future investing goals should play an important role in helping to decide how much money you should put down on your new home. There are tax advantages with mortgage interest to consider, avoiding mortgage insurance, size of your monthly mortgage payment, amount of liquid assets readily available and many other items that need to be taken into consideration to help decide how much money you would like to put down on a new home.