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Learning About Various Down Payment Options

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For many homebuyers, particularly those going through the process for the first time, the down payment can be one of the biggest sources of stress. This lump sum, paid upon closing as a percentage of the principal loan amount, is generally the largest single figure you’ll pay during the home loan process, and some people worry about what will happen if they don’t have the proper funds for a full down payment.

At Primary Residential Mortgage, we’re here to help. Like mortgage rates, the amount expected for your down payment may vary depending on several factors – and there are also programs available that can ease the heavy burden of a down payment. Let’s look at what you need to know here.


A conventional mortgage, one not insured by the government, will have a certain minimum down payment thresholds. While this number used to be 5 percent, it has gone down to 3 percent as of the year 2015 after Freddie Mac and Fannie Mae, government-sponsored corporations that buy loans in the secondary market, began supporting this change.

VA/Military Loans

In addition, first-time buyers who are active or retired military service members might be eligible for a VA loan, in which case the down payment will be zero. This program, which is among the top options out there for anyone, offers 100 percent financing with no down payment at all. Borrowers often even avoid mortgage insurance, which we’ll discuss below.

Federal Housing Administration

Another type of government assistance comes in the form of FHA loans, which require as little as a 3.5 percent down payment. These loans are not limited only to first-time buyers, but they are very popular among this group of people.

Mortgage Insurance

In most cases where you have a home loan that accounts for over 80 percent of property value, you’ll also have to secure some kind of mortgage insurance. In most cases, this will simply be rolled in with your loan – your monthly payments will go up. While some view mortgage insurance negatively, it’s really a way of providing homeownership for people who are unable to get to what’s often a burdensome 20 percent down figure.

For more on down payment options, or to learn about any of our your next home,speak to the pros at Primary Residential Mortgage ( Contact Us ) today.

PRMI NMLS 3094. PRMI is an Equal Housing Lender. Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. Programs, rates, terms, and conditions are subject to change and are subject to borrower(s) qualification. This is not a commitment to lend. Florida Office of Financial Regulation MLD646. Opinions expressed are solely my own and do not express the views of my employer.

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