Ask the Expert: Should we wait and save more money for a down payment, or buy now while interest rates are low?

There are a lot of variables to consider when purchasing a home, and the size of a down payment is just one of them.

But to start there, the down payment amount can vary considerably. Traditional guidelines recommend putting 20 percent of the purchase price down, but in practice, that doesn’t always happen.

So if you are in the market to purchase a $250,000 house but don’t have access to $50,000, you still have plenty of options. If you do have 50k to put down, however, it can make your path faster and easier.

Some loans, particularly those aimed at first-time home buyers, allow for down payments of less than $1,000! Other products also allow a buyer to put down less than 20 percent — in that case, you’d pay a small additional cost via private mortgage insurance, or PMI. PMI is calculated as a percentage of the overall loan, usually between a half and one percent, and can be removed when the buyer pays down enough of the principal or accrues enough equity in the property.

Of course, interest rates are an important factor, and it’s true that interest rates on mortgages are at historic lows. A 30-year fixed rate is right around 3 percent, while a 15-year fixed rate is about 2.25 percent.

There has also been less inventory and a lot of competition lately, which drives prices up. This is not positive or negative; as a buyer, you want to make sure you get a good deal and also that you can afford your monthly payment. If more properties come onto the market, even more foreclosures, you may still wind up with a similar monthly payment if interest rates rise. So the decision on timing is uniquely yours, and it’s important to ask yourself what you’re looking for as well as how long you plan to stay.

If you’re renting, consider how much your rent is expected to increase in the coming years. Are rents high in your area or are they more affordable? These factors affect your ability to save money for that down payment.

Each person’s situation is unique, and a professional can help you decide on the best timing and strategy.