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How much should I save for the down payment for my Home?

The largest payment you’ll likely make on your home is the first one. That’s the down payment. It’s a percentage of the total purchase price. For example, a 5% down payment on a $400,000 home would be $20,000. The larger the down payment, the lower your monthly mortgage payment should be. So how much should you save? There’s no single answer. It all depends on the minimum down payment requirement.

What is the minimum down payment?

Most loans require a minimum down payment, but the amount they require varies according to your lender, the type of loan you’re applying for and your credit score. In fact, some government-backed loans require no down payment at all!
Let’s look at some examples.

  • Veteran Affairs (VA) loans usually require no down payment. These are available to active and retired military personnel and their eligible surviving spouses.
  • FHA loans require a minimum down payment as low as 3.5%.
  • Conventional loans backed by Fannie Mae or Freddie Mac require a minimum down payment as low as 3%. There are other conventional loans not backed by the government but follow the same Fannie Mae and Freddie Mac guidelines for down payments.
  • USDA loans have no down payment requirement. Homebuyers must meet certain income limits. These loans are limited to properties in rural and certain suburban areas.

See if paying more than the minimum makes sense for you.


For some buyers, this is the way to go. A larger down payment can:

  • Result in a lower monthly payment.
  • Qualify you for a lower interest rate.
  • Reduce upfront fees.
  • Give you more equity in your home from Day One of your mortgage.

Plus, if your loan requires private mortgage insurance, a large down payment may eliminate that requirement.

How much should you save? You decide.

As you can see, there is no single answer that works for every first-time homebuyer. The type of loan you’re applying for, the cost of the home, and your credit score will determine the minimum amount required. Beyond that, it’s all in your court. You should assess your financial situation and realistically determine what is possible or desirable for you. A larger down payment will lower your monthly payments but that may not work for you right now. It might leave you in a tight a financial bind.
Let Caliber help you calculate.

For starters, use the Caliber Home Loans Mortgage Calculator to see how much the size of the down payment will impact your monthly payment. Then work up a monthly budget using that monthly payment number. Make sure you allocate some funds for things that may come up, like repair work and unexpected expenses .

Make as informed a decision as possible, so connect with me when time permits. I will shop around for you and compare different types of loans that you may qualify for along with seeing if there is an especially attractive mortgage rates available.

At Caliber, we say we are driven by a passion for helping people realize their dream of homeownership. We mean that sincerely and we walk the walk. Our goal is to put you in the home you dream of with as few problems and expenses as possible. We’ve got the knowledge and we are ready to work for you!

First-time buyers

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Contact our office with any questions, concerns or ideas.  No Question is too small. 

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