When you’re dreaming about buying a home, one of the first questions you might ask is: “How much do I need for a down payment?” It’s a great question—and one with more than one answer depending on your unique financial situation and goals.
Understanding the Basics
A down payment is the initial upfront amount you pay toward the purchase of a home. The rest is typically financed through a mortgage loan. Traditionally, many people think they need 20% of the purchase price, but that’s not a one-size-fits-all rule anymore.
Common Down Payment Options
- Conventional Loans
These are the most common mortgage types. Many lenders offer conventional loans with as little as 3% to 5% down, especially for first-time buyers. However, if you put down less than 20%, you’ll likely need to pay private mortgage insurance (PMI)—an added monthly cost that protects the lender if you default.
- FHA Loans
Backed by the Federal Housing Administration, FHA loans are popular with first-time buyers and those with lower credit scores. They typically require a 3.5% down payment, making them more accessible if you don’t have a large amount saved.
General FHA Loan Requirements:
- FHA minimum credit score: 580.
- FHA minimum down payment: 3.5%.
- MIP (Mortgage Insurance Premium) is required.
- A debt-to-income ratio of less than 50% or less.
- The home must be the borrower’s primary residence.
- The borrower must have a steady income and proof of employment.
- VA Loans
“If you’re a veteran or active-duty military member, you might qualify for a VA loan, which, in most cases, requires no down payment and comes with no PMI. It’s a fantastic benefit for those who have served.”
- USDA Loans
For those buying in rural or qualifying suburban areas, USDA loans may also require no down payment. Like VA loans, they’re designed to help specific groups of buyers with affordable financing.
The 20% Myth
Putting down 20% or more does have its perks: no Private Mortgage Insurance (PMI), potentially better interest rates, and lower monthly payments. But it’s not mandatory. In fact, many homeowners get into homes with far less—and use the savings for renovations, furniture, or building an emergency fund.
How Much Should You Put Down?
The right amount for you depends on:
- Your budget and savings
- Your monthly income and expenses
- Loan program eligibility
- Your comfort level with monthly payments and PMI
Even if you qualify for a low-down-payment option, it’s worth considering whether increasing your down payment could benefit your long-term financial picture.
Need Help Navigating Your Options?
There’s no single “right” answer to how much you need for a down payment—but you don’t have to figure it out alone. I’m here to walk you through your options, help you compare loan programs, and determine what works best for your goals.
Let’s talk about your homeownership plan—whether you’re buying your first home, upgrading, or investing in a second property.
At Core Bank, we proudly serve a diverse community—including many Spanish-speaking families who are working toward the dream of homeownership. We understand that navigating a mortgage can feel overwhelming, that’s why we’re here to support you in every step of the way.
I’m here to work with you—and your family if needed—to create a mortgage plan that aligns with your goals and values.
Lili Marquez – Core Bank
Mortgage Loan Originator
402 829-3458
