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Down Payments: How Much Money Do I Need To Buy My Dream Home?

Photo of Michael Bernstein Author: Michael Bernstein
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A mortgage loan will assist in paying for a significant portion of the home, but even if a homeowners can afford to make the monthly mortgage payments, many homebuyers delay buying a home or applying for a mortgage because they believe do not have enough money to pay the down payment when, in fact, they may have more than enough!

Does this sound like you? If yes, this article will help answer the question “How much money is enough for the down payment to buy my dream home?”

The answer largely depends on the price of the home and the type of loan you are qualified for. The four types of loans that this article will discuss are Conventional Home Loans, FHA Home Loans, USDA Rural Home Loans, Veteran Administration (VA) loans.

A large house with a wraparound porch surrounded by bright green grass.

Conventional Home Loans

With a conventional home loan, the lowest down payment a homebuyer can qualify for is 3% of the purchase price if you meet the credit requirements necessary for a 3% down payment. However, some programs now exist to get you into your home with as little as 1% down! If your credit score is lower the credit score required for a 3% down payment, you may still qualify for a conventional loan with a low down payment of 5% of the purchase price. It’s important to talk to your lender to understand the credit requirements with each loan.

FHA Home Loans

With an FHA home loan, homebuyers with a credit score of 580, which is lower than the credit score required for a conventional loan, can still obtain home ownership with a lower down payment requirement of 3.5%. Even a homebuyer with a credit score of 500 can still qualify for an FHA that requires a low down payment of just 10% of the purchase price.

 

USDA Rural Home Loans

A USDA rural home loan is a great option for any borrower looking to buy outside of urban areas since a purchaser can obtain a loan that provides for 100% financing, which means that no down payment is required.

VA Home Loans

As discussed in our article about Veteran Benefits, veterans have a great opportunity to obtain a VA home loan with options that provide 100% financing (no down payment) and no mortgage insurance. With a VA loan, the only financeable closing cost charge is the VA funding fee; all other closing costs must be paid at closing.

Don’t miss out on the possibility to buy a home due to a concern of lack of money. If you have any concerns about the amount of money required for the down payment, or if you have concerns that providing the money for a down payment will cause you to drain all of your savings, please read our article on down payment gifts or call us at 512-881-5099, and we'll be happy to answer any questions you might have. LendFriend is here to help!
Picture of Michael Bernstein

About the Author:

Michael Bernstein

Michael is the co-founder of LendFriend Mortgage and a dedicated advocate for homebuyers nationwide. With thousands of closed loans and over a decade of helping first-time homebuyers achieve the American Dream, Michael is passionate about delivering smart, personalized mortgage solutions—especially for first-time buyers and military families. As a broker, he works with multiple lenders to find the best fit and lowest rates for each client. If you have questions, want a second opinion, or need help exploring your options, Michael is always ready to connect.