Understanding Your Down Payment Options

Figuring out how much to put down when buying a home can feel overwhelming—but you don’t have to make that decision alone. Our team is here to guide you. The right approach depends on your financial goals, personal comfort level, and overall situation.

Low Down Payment Programs

FHA Loans
With as little as 3.5% down, FHA loans allow buyers to purchase a home or condo with a minimal upfront investment. However, this convenience comes with a tradeoff: mortgage insurance. When a buyer puts down less than 20%, insurance is typically required to protect the lender. The smaller the down payment, the higher the insurance premium tends to be.

USDA Loans
Dreaming of a home in the countryside or a quiet suburb? USDA loans could be a great fit. These loans offer 100% financing—no down payment required—for eligible properties in qualifying areas. Keep in mind that household income caps apply, and mortgage insurance is still a factor if less than 20% is paid upfront.

VA Loans
If you’re a veteran or active-duty service member, VA loans can be a powerful tool. These loans often cover the full cost of the home with no down payment required, making it easier for military families to secure housing. Some buyers may also qualify for loan combinations (like an 80/20 structure) to reduce the need for mortgage insurance entirely.

Unique Circumstances?
Even if your credit or income isn’t perfect, don’t worry—there may still be options available. We’re here to help you explore every possibility.

What’s the Right Down Payment for You?

Every buyer’s financial situation is unique. Whether you want to keep your upfront costs low or reduce long-term interest, the amount you choose to put down has major impacts. That’s why it’s so important to review your goals and talk it through with a mortgage expert.

Reach out to our team today for personalized guidance tailored to your budget and comfort level.

Pros and Cons of Lower Down Payments

What It Costs:
Choosing a low or zero down payment option may lead to:

• A higher interest rate on your loan 
• Monthly mortgage insurance payments 

Fortunately, mortgage insurance isn’t permanent. As you build equity in your home, you may be able to refinance and eliminate this extra cost once you reach 20% equity.

What You Gain:
Despite the added expenses, low down payments offer meaningful advantages:

• Less cash required at closing 
• Greater return on investment if home values increase 
• Flexibility to invest your savings elsewhere 

Additionally, during the early years of your mortgage, a large portion of your payment goes toward interest—which may be tax-deductible, giving you a potential year-end benefit.

Making the Right Financial Move

Just because a lender approves you for a certain amount doesn’t mean you should borrow that much. Think about what monthly payment fits your lifestyle and goals.

Need help weighing your options? Speak with one of our mortgage specialists today to create a loan plan that’s right for you.