How Much Down Payment Do You Need to Buy a New Home?
For many homebuyers, the down payment can feel like one of the biggest hurdles between dreaming about a new home and owning one. But one of the most common misconceptions about buying a home is that you always need to put 20% down.
In reality, your down payment can vary significantly depending on your financial situation, loan program, and eligibility.
Understanding your options early can help you create a realistic savings goal and move forward with greater confidence.
What Is a Down Payment?
A down payment is the portion of your home's purchase price that you pay upfront rather than finance through your mortgage.
For example, if you purchase a $350,000 home and make a 5% down payment, you would contribute $17,500 toward the purchase price and finance the remaining amount, subject to your loan terms and other costs.
The amount required depends largely on the mortgage program you select and your qualifications.
Do You Need 20% Down to Buy a Home?
No. While putting 20% down can have advantages, many qualified buyers purchase homes with significantly less.
Common financing options may include:
- Conventional loans: Qualified borrowers may have down payment options starting around 3%, although requirements vary.
- FHA loans: FHA financing may allow qualified buyers to put as little as 3.5% down.
- VA loans: Eligible veterans, active-duty service members, and certain surviving spouses may qualify for financing with no down payment.
Watch: Understanding Your Down Payment Options
Not sure how much you need to put down on a new home? In this quick Mortgage Minute, Megan from Victory Mortgage breaks down down payments and what homebuyers should know as they prepare to purchase.
Ready to explore your options? Fischer Homes' preferred lender, Victory Mortgage, can help you understand available loan programs and determine a down payment strategy that fits your homebuying goals.
How Does Your Down Payment Affect Your Mortgage?The size of your down payment can affect more than how much cash you need at closing.
A larger down payment generally means borrowing less, which can reduce your monthly principal and interest payment. Depending on your loan, your down payment may also affect mortgage insurance requirements, interest rates, and other financing costs.
That doesn't necessarily mean putting down as much as possible is the right strategy.
Your lender can help you compare scenarios so you understand the tradeoffs between putting more money down and keeping additional savings available for moving expenses, furnishings, emergencies, and life after closing.
Remember to Budget Beyond the Down Payment
Your down payment isn't the only upfront expense associated with buying a home.
Depending on your transaction, you may also need funds for closing costs, prepaid taxes and insurance, moving expenses, and other costs associated with your purchase.
That's why it's important to think about your total homebuying budget rather than focusing on one number.
Explore Your Down Payment Options With Victory Mortgage
You don't have to determine the right down payment on your own.
Fischer Homes partners with Victory Mortgage, our preferred lender, to help buyers understand their financing options and determine which mortgage programs may fit their financial goals.
Victory Mortgage can help you compare potential down payments, loan programs, monthly payments, and closing costs before you make a decision. Fischer Homes also currently directs buyers to Victory Mortgage for pre-approval and financing guidance.
The sooner you understand your options, the sooner you can establish a realistic path toward your new home.
Ready to understand your buying power? Get prequalified with Victory Mortgage and start exploring new Fischer Homes today.