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While it s possible to buy a house with less than 20% down the average is 12% overall and 6% for first-time buyers going that route also might mean paying private mortgage insurance, or PMI, until your equity is at least 20% of the home s value. PMI can run $30 to $70 monthly for each $100,000 borrowed, according to Freddie Mac.
For a $250,000 house, a 6% down payment would be $15,000. At 20%, it would be $50,000. Those amounts don t include other costs related to the purchase, such as transfer taxes or points, which generally lower the interest rate on the loan. (One point is equal to 1% of the mortgage).
Nevertheless, using Roth IRA money to buy a house is not a strategy that makes sense for everyone. Here s what to consider.