You May Not Need as Much as You Think for Your Down Payment [INFOGRAPHIC]

February 2023 archive: A 20% down payment is not required for every home loan. The original infographic illustrates lower down payments among earlier national buyers; it does not set a minimum or predict what a Telluride lender will approve today.

Read the historical figures as a comparison

The infographic displays 6% for first-time buyers, 14% for all buyers and 17% for repeat buyers, attributed to the National Association of REALTORS®. These are the historical typical/median down-payment figures used by the original article, not current averages or minimum loan requirements. NAR's discussion of its 2022 buyer profile confirms the 6% first-time and 17% repeat-buyer figures. An individual household may put down more or less.

Low-down-payment programs have different rules

• FHA: Eligible borrowers may qualify with as little as 3.5% down. FHA loans have mortgage insurance and other credit, property and loan-limit requirements. See the CFPB's FHA overview.
• VA: Eligible service members, veterans and certain surviving spouses may qualify for a no-down-payment purchase loan. Entitlement, lender underwriting, occupancy, appraisal and purchase-price conditions matter; a funding fee may apply. Review VA purchase eligibility.
• USDA: Eligible borrowers and properties may qualify for 100% financing through applicable rural housing programs. Income, location, occupancy and lender requirements apply. A rural-sounding address does not by itself establish eligibility; check the USDA guaranteed-loan program.

The original shorthand “0–3.5%” covered different programs. It did not mean that every borrower could choose any percentage in that range, or that a zero-down loan required no cash at closing. Closing costs, reserves, prepaid expenses, insurance or program fees may still need to be funded.

Decide what is comfortable, not only what is permitted

A smaller down payment can leave more savings available, while a larger one can reduce the loan balance and sometimes mortgage-insurance costs. Ask a lender to compare total monthly payments, cash to close, fees and remaining reserves under the programs for which you qualify. Then match that budget to the property, including taxes, association dues and maintenance.

Anne-Britt Ostlund at Mountain Rose Realty can help connect the home search with the financing conversation so you can assess readiness using your own numbers.

For a Telluride purchase or sale, contact Anne-Britt Ostlund at Mountain Rose Realty to compare local properties and coordinate with your lender.