And it doesn't matter if you can afford it if no one will give you a loan. So the best method is for you to know before you enter your first model home. So let us reason together. Down payment is the actual amount you are paying that goes towards the purchase price of the home. Prepaids are insurance and taxes that are paid in advance.
Lets look at each one a little closer.
The percentage depends on the mortgage program that you choose. The down payment requirements are usually different for each mortgage program. Each one will be discussed later in the book. As mentioned earlier prepaids are taxes and insurance paid in advance. Most mortgage programs require 14 months hazard insurance paid in advance.