We are thinking about buying our first home. My question is, what is the least percentage you can have for a down payment? Ideally we would like to

Asked by Alayna, Lubbock, TX Mon Sep 21, 2009

have 20%, but it is probably going to be 8 or 10%. Our credit is good - our score was 795 when we checked it, and we have no debt. Will our interest rate go up with a lower down payment and are you required to get PMI with a down payment less than 20%? If so, can you cancel the PMI when you get 20% equity in your house? But I'm guessing that would take a while since I've heard your first payments all go towards interest. Is it just better to wait till you have 20% saved up? I appreciate your help!


Help the community by answering this question:

+ web reference
Web reference:


Jon Spears, Agent, Austin, TX
Fri Nov 8, 2013
Hi Alayna, based on your credit I would be bale to do a conventional 95% LTV.
Visit http://www.mylendingplace.com and let me know if I can be of any assistance to you.
0 votes
Jon Spears, Agent, Austin, TX
Mon Nov 4, 2013
Hey there, how are you?
I own Mylendingplace.com I can offer a loan up to 95% of the value of a home dependent on credit.

If you would like please visit http://www.mylendingplace.com and let me know if I can be of any assistance to you.
0 votes
Beverly Jones, Mortgage Broker Or Lender, College Station, TX
Thu Nov 29, 2012
Hi, Alyssa!

Congratulations on your excellent credit score! That is an achievement many have not obtained!

I have loans with as little as 5% down...ideally, you would want to put at least 20% down to avoid mortgage insurance, but not many can do that! If you have 10% down and plan to stay in the house you want to buy for a while, you can pay your MI (Mortgage Insurance) upfront so you will not have the monthly payment.

Ironically, the lower you finance, or the more you put down, the higher your interest rate could be! Doesn't make sense, does it? Investors pay better rates to those who finance $150,000.00 as opposed to those who finance $100,000.00! I assure you, with your good credit, we can get you the best/lowest rate possible!

I would love the opportunity to talk with you and answer any and all questions you may have!

You can contact me at 832.419.2767 or 877.933.0036 X 300 or ask for Beverly.
My email address is beverlyj@fairwaymc.com
0 votes
Nancy Rawls, Agent,
Wed Aug 3, 2011
Great question. Way to go on having a great credit score and no debt! Your interest rates should be a fixed rate. Your payment will decrease with a larger down payment (20%) due to no PMI charges. Anything less than 20% down payment will require PMI. FHA requires 3.5% down, Conventional 5.0% down and USDA is zero down for approved rural areas with 100% financing. Home ownership is a true American advantage. Remember that any interest you pay is tax deductible, so even if your first years of making a payment all go towards interest it will help you on your income taxes. It is always better to own than to rent when you can afford the payments. Buy now! Interest rates are low, lots of homes to choose from, and the pride and benefits of home ownership out way the others.
0 votes
Sera Smith, , Plano, TX
Wed Nov 25, 2009
FHA loans reuire the least amount of down payment at 3.5%. A conventional loan split as a 90/10/10 or a 90/15/5 will still require you to pay PMI as the first loan is over 80%. You really want the first loan to be 80% and no higher to not pay PMI. You need to ask for a 80/15/5 or an 80/10/10 loan. The first mortgage would be 80% of the sales price and the second mortgage would then be either a 15% or 10% with you putting a down payment of either 5% or 10%. Do you have money for the closing costs? The realtor can help you in negoiating a contract that will have the seller paying for some of the closing costs, if not all. Now that being said, you can buy down the interest rate. Is it better to wait till you have the 20%? Not necessarily. Right now you can get more home for your money and the rates are very low.

I hope this helps you. If you have any more questions, just email me or call me and I will gladly help you out.

Sera M. Smith
Mortgage Loan Officer
Bluesky Lending
0 votes
Scott Brooks, Agent, Austin, TX
Tue Sep 22, 2009

Sounds to me like you are in great shape to buy a house. The amount to put down is really up to you. My suggestion would be to shop the loan to get the best deal. Tell them you want to do a 90/10/10 or a 90/15/5 to avoid PMI. If you would like to know some reputable lenders other than banks I could help you with that.

Please feel free to call me at 512-217-4761 or email me direct at scottbrooks@austin.rr.com.

Thank you


Scott Brooks
Keller Williams Realty
1801 S Mopac STE 100
Austin Tx 78746
0 votes
Gary Miljour, , Chandler, AZ
Tue Sep 22, 2009
Dear Alayna,

The down payment really depends on your unique situation and circumstances. For example a VA loan will finance 100% with no down payment required, but you have to be a veteran. The most common loan today with the least amount down is FHA financing which only requires 3.5% down payment. FHA is a government backed loan program and the mortgage insurance premium is usually cheaper than conventional. But again this may not be your best bet based on your unique situation. It also depends on where you want the payment to be and how much of a home you want to qualify for. My suggestion would be to talk with a lender who can do your loan in your local market. Talk with that lender and come up with a mortgage plan based on all your needs. The down payment is just one part of the overall decision on which loan program will be the best for you. If you are looking to buy in Arizona, I would be happy to speak with you.
0 votes
Greg Knox, , Cedar Knolls, NJ
Tue Sep 22, 2009
Actually you can get 100% financing with a USDA loan, but there are geographinc and income restrictions.
Also, with an FHA loan, your rate should be the same whether you put down the minimum3.5% or 50%.

As to waiting until you gather 20%, that culd be foolish. If you can find a place to close on before November 30, the government will give you 8,000 after tax dollars. Combine that with very low interest rates and prices way below their highs and you have an almost unbeatable situation. Only if prices fall a little further can you do better and there is no guarantee of that.
0 votes
Robert Hyder, Mortgage Broker Or Lender, Milford, CT
Tue Sep 22, 2009

There is a lot of information to answer here, so I will break it down for you. First, the lowest down payment you have to put down is 3.5% with an FHA mortgage loan. The smaller the downpayment, the higher the mortgage rate. If you can put down between 10 and 20%, then you will be better off with a conventional mortgage loan.

As for the PMI, there is a program or two out there that does not require mortgage insurance, but they are few and far in between. To answer your question on removing the PMI when you get 20% equity, Citimortgage's policy (which is more than likely similar with most companies) in their wholesale division is if the borrower wants to get rid of the PMI after the LTV was down to 80, they would have to refinance. However, if they choose not refinance, the LTV would have to be reduced to at least 75 in order for the PMI to be removed. In this scenario, obviously a new appraisal would be needed. You would need to call the servicing department of your servicer (who you send your monthly mortgage payment to) to get their policy on PMI removal.

You are accurate about the initial payments going mostly towards interest, rather than the principal balance. Because home values are so low now, they may start to rise again in the near future, so you can gain equity when that happens too.

I hope this information helps. Best of luck!

Total Mortgage Services
Web Reference:  http://www.totalmortgage.com
0 votes
Search Advice
Ask our community a question

Email me when…

Learn more