6101 Bollinger Canyon Rd #344 San Ramon Ca 94583



The Low-Down on Down Payments

A down payment is the amount of money you put down on a home when you purchase it. The balance is typically financed as part of your home loan, and it’s calculated as a percentage of the purchase price. Down payments can vary greatly depending on the type of program and your financial picture. There are programs that require no money down, all the way up to as much as 50% down in some rare instances. So what does this mean for you? 

For most buyers there are low down payment programs available, often allowing for a down payment of under 10%. Additionally, there are grants and assistance programs that can help make up the difference for eligible borrowers. Your loan advisor spends time regularly learning the ins and outs of all of these programs, and knows what is available to you by program, as well as local assistance programs that you might qualify for. 

How Much Down Payment do I Need?

There is a long-standing misconception about down payment requirements. A survey from Fannie Mae shows only 17% of consumers know the minimum options are actually less than 5% of the purchase price and 40% don’t know how much they need at all.

The amount of down payment required depends on several factors, but there are a few steadfast programs that apply to most first time buyers. VA loans require no money down in most instances, while FHA loans require 3.5%. A regular conventional loan may require as little as 3% down, but will also require private mortgage insurance (PMI), which should be taken into consideration when looking at what your monthly payments will be.

According to NerdWallet, 32% of homeowners bought their home with 5% or less, while another 16% bought with 6-10% down. 

Are you looking for ways to get that down payment pulled together? Check out our blog article on how to quickly save for a down payment for practical, easy to implement ways to quickly save up!

Down Payment Assistance Programs

While some people have a family member or loved one that can help with a down payment, not everyone does. It’s important to know that there are thousands of down payment assistance programs available, offered regionally or even nationally, with some of them specifically created to help first time buyers. 

Some of these programs are loans, either with monthly payments required or no payments required until you sell the home. Others are grants that don’t have to be repaid, or forgivable loans that are forgiven once the homeowner has met the criteria for the program. We have an entire article to help you check out the differences.

Down Payment Assistance can show up in various ways – we’re here to help you determine which are available for you, and help guide you through the process. 

We're Here To Help

We’re always happy to chat, but sometimes you need to do things at your own pace. Our tools and resources are available whenever you need them.

Copyright ©2022 Shining Star Funding A division of American Pacific Mortgage LLC | NMLS ID # 1850