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It’s a common misconception that every home buyer needs to have 20% saved up before even looking for a house. There are many ways you can get away with a lower down payment. Find out everything you need to know about how much down payment you need to buy a house, and what factors affect the amount.

Down Payment Variances

A down payment can be anywhere from 0% to 20% or more, and is based on a combination of factors:

Type of loan

Your Loan Officer (LO) should tell you about all of your options when it comes to loan types available to you, and what the down payment would be for each.  

Conforming loans

Conforming loans are designated to be sold to either Fannie Mae or Freddie Mac, and make up the vast majority of loans. Down payment requirements can range from 3% up to 20%, and anything under 20% will require that you buy Private Mortgage Insurance (PMI) to help protect your lender in case you default. You can usually stop paying for PMI once your equity reaches a certain value point. 

FHA loans

FHA loans are backed by the Federal Housing Authority, and designed to let home buyers get into a home without having to wait and save for years to make the down payment. An FHA loan can have a down payment as low as 3.5% if you meet certain credit score minimums. You will have to carry PMI on an FHA loan no matter what and can’t remove it. FHA loans are usually given to borrowers with bad credit who don’t qualify for a conforming loan.

VA loans

VA loans are only for eligible candidates such as military veterans, active military members, or spouses.  You’ll need a Certificate of Eligibility (CoE) to get a VA loan, but your Loan Officer can help you get the CoE. You can have a zero down payment, and won’t have to carry PMI. A funding fee is required, but can be rolled into the loan, and might be waived if you are a disabled veteran. 


Typically, great credit can qualify you for a lower down payment, while bad credit can mean needing a bigger chunk of cash to put down.. Try to improve your credit as much as possible before applying for a home loan.  


Debt-to-income ratio, or DTI, is also used to calculate your down payment. When monthly bills are high, a bigger down payment can lower your monthly mortgage bill, making your lender feel more confident in your ability to keep up. 

Personal Finances

You absolutely don’t have to base your home purchase on getting the lowest down payment, In fact, if you have extra money to put in for this purpose, it can significantly cut the amount of interest you pay over time. You could get your home paid off in fifteen or twenty years instead of thirty. Talk to your Loan Officer about your options. 

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Rates & Money is your go-to destination for free information about mortgages. Our home buyer guides and home loan articles are designed to help you make informed decisions when buying a home


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Use our free mortgage calculator tools to estimate your monthly mortgage payments based on your unique loan scenario. See how your monthly payment changes by making updates to your home price, down payment, interest rate, and loan term.

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