Understanding Down Payments: How Much Do You Really Need to Buy a Home?
One of the most common myths in home buying is that you have to put down 20% to buy a home—but that’s simply not true.
Let’s break down the facts about down payments:
1. You Don’t Need 20% Down
While a 20% down payment can help you avoid private mortgage insurance (PMI), it’s not a requirement. In fact, many buyers—especially first-timers—put down much less. Conventional loans often allow as little as 3-5% down, while FHA loans require just 3.5%. USDA and VA loans may require no down payment at all for qualified borrowers.
2. A Bigger Down Payment Has Benefits
Putting more down upfront can lower your monthly mortgage payment, reduce the amount of interest paid over time, and help you build equity faster. But don’t drain your savings—it’s all about balance.
3. Don’t Forget About Closing Costs
In addition to the down payment, you’ll need to plan for closing costs—typically 2–5% of the home’s purchase price. These cover things like lender fees, title insurance, and appraisal services. Sometimes, you can negotiate to have the seller cover part of these costs.
4. Assistance May Be Available
There are many down payment assistance programs available at the local, state, and national level—especially for first-time buyers. These programs can offer grants, forgivable loans, or reduced rates to help make homeownership more affordable.
Bottom line: You may be closer to affording a home than you think. Before assuming you can’t buy, let’s talk. I’ll help you explore your options and create a realistic path to owning your dream home.
Written by: Amanda Eaton
Amanda Eaton is a Jonesboro, AR based secondary market lender serving customers in Arkansas and Tennessee as our Mortgage President. Whether you're a first-time homebuyer or long-term real estate investor, Amanda and her team offer simple, proven, reliable service for all your home loan needs. Apply online or call our mortgage team at (870) 215-4723 ext 1006.