The initial capital investment required to purchase a condominium, often expressed as a percentage of the total purchase price, significantly influences the loan amount, interest rate, and monthly mortgage payments. For example, a 20% investment on a $300,000 condominium would be $60,000.
A substantial initial investment can secure a lower interest rate, reduce monthly payments, and potentially eliminate the need for private mortgage insurance (PMI). Historically, 20% has been considered a standard amount, though lower percentages are often available, particularly through specific loan programs designed for first-time homebuyers or other targeted demographics. The prevailing market conditions and the specific lender’s criteria also play a role in determining acceptable amounts.
