20 percent down first time buying home

First Time Home Buyer

Do You Need to Put 20% Down When You’re Buying Your First Home?

When you’re thinking of buying your first home, there are a lot of things you need to figure out before you can start looking. Not only do you have to get your credit score in order and set your budget, but you also have to think about how much of a down payment you want to make to secure the loan. Your down payment can influence your loan’s terms significantly. The industry standard has long been 20 percent of your home’s sale price, but do you have to put such a large payment down?

20 Percent Is the Gold Standard

Lenders love it when you offer to make a 20 percent down payment on a home. It shows that you’re serious about the loan and automatically gives you 20 percent equity in your house. Even better, it means you’ll end up borrowing less which can keep your monthly loan payments low and affordable.

You Don’t Have to Pay the Full 20 Percent

Just because the industry standard down payment comes to around 20 percent doesn’t mean you have to put the full 20 percent down when buying your first home. There are first-time homebuyer’s programs that can help you qualify for a mortgage even if you don’t have much saved up for a down payment.

Some programs function as loans to help you meet the full 20 percent down payment amount. Others are grants that you won’t have to repay. This money will get sent to the lender and helps you qualify for lower interest loans.


If you don’t want to take out a second loan or grant, you can always apply for an FHA loan. This type of financing is meant for lower income borrowers who don’t have savings to use as a down payment. You will still need to put some money down, however. Most borrowers can qualify for an FHA loan if they’re able to put at least 3.5 percent of the home’s sale price down.

Which Is Best?

Ultimately, it’s always best to pay the full 20 percent. It will keep you from having to invest in private mortgage insurance and makes your monthly payments lower. However, if you can’t afford the full 20 percent, there are options you can and should consider.

Reach Out Now

Buying your first home without the full 20 percent down payment is possible, but you’ll want to get help as soon as possible. Contact our team to discuss your financial situation today.