Is a down payment absolutely essential in buying a home? If so, How much does it have to be?

Asked by Bastied, Carroll Park, Philadelphia, PA Wed Jun 2, 2010

Absolute beginner at home buying.

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Larry Lichtm…, Agent, Bala Cynwyd, PA
Wed Jun 2, 2010
That all depends on your level of employment stability, credit rating, savings, debt to income ratio, monthly and annual income (verified by tax returns, etc.). As little as 3.5% up to 35% down payment may be required by a lender finance a purchase for you.

Sometimes, there may be distressed sellers that may be willing to hold the note. If they own the property outright free and clear, with no mortgage, they may be willing to work a no money down deal, but higher monthly payments. Creativity can always help but if you have no down payment you must be sure you have great credit and a good, steady income.

All the best,
Larry Lichtman
1 vote
Jeanne Feeni…, Agent, Basking Ridge, NJ
Sun Jun 13, 2010
Hi there, from a seller's point of view, I would say that a down payment is absolutely essential to secure a deal. You've gotten good responses that show that there are many answers depending on financing alternatives and your financial position. But remember that the seller will evaluate each component of your offer, and one way to evaluate strength and commitment is by the size of the down payment.

I would also add a word of caution - as a newcomer to the process, be cautious about buying a home with little to nothing down. When you do that, the slightest downward swing in value essentially puts you under water. That is largely why we are where we are now with short sales and foreclosures.

Find yourself a great agent that has experience - and enjoys working with first time buyers. She/he can explain the entire process and should be with you every step of the day. She/he can also refer you to good mortgage resources. The better the resources that support you, the smoother your transaction will be. Good luck!!

Jeanne Feenick
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0 votes
Dave Lombardo, Agent, Philadelphia, PA
Sun Jun 6, 2010
There is no easy way to explain this in the short anwsers on trulia. You should seek out a good buyer agent. Someone who will be able to sit with you and explain the details of the buying process. I would also recomend speaking to a good loan officer as well.
Good luck and I hope you find your home.
0 votes
Bill Eckler, Agent, Venice, FL
Wed Jun 2, 2010
There are any number of approaches that can be used to satisfy a deposit requirement for the seller. An important note to remember is that you want to be percieves as a serious buyer to the seller and one way to create this impression is to offer a reasonable deposit up front without playing any games.
0 votes
, ,
Wed Jun 2, 2010
USDA, VA and PHFA Keystone plus have very low down payment options. O to $500.

Alan Openshaw
Cornerstone Lending
215 953 0800
cell 267 992 7276
0 votes
Elaina Dimuz…, , Blue Bell, PA
Wed Jun 2, 2010

The only kind of mortgage that does not require a down payment of some sort is a VA mortgage and it is only available to Veterans. PHFA, if offered by that particular bank does as low as 3% and FHA mortgages require at least 3 1/2% down which is a good way to go if you're short on cash and a 1st time homebuyer. For conventional mortgages anything less than 20% requires mortgage insurance which is a monthly pmt. added on to your principal and interest payment and is calculated according to your loan amount. Don't forget, you will also need money for closing costs which also runs in the thousands depending on the cost of the home. Hope that helps! I am a realtor with Coldwell Banker and if you have any other questions, feel free to email me at or call me at 215-760-7050..
0 votes
Carol Cei, Agent, Maple Glen, PA
Wed Jun 2, 2010
Hello, Bastied,

The cheapest way to go, if your income allows, would be to do the PHFA keystone Plus. You would need to use $1,000 of your money and then the rest of the 3.5% total could be grants, gifts, etc.

If you would like to discuss how to do this and get the grant money, etc.just give me a call.

Carol Cei
ReMax Action Realty
215-358-1223 (Office)
215-643-9661 (Cell)
0 votes
Maura Mcdonn…, , Philadelphia, PA
Wed Jun 2, 2010
Hi There --

There are a few 0 down programs still in existance. They are limited to Rural Housing and VA Loans. Downpayment requirements range from 3% PHFA to 3.5% FHA. I am an experienced Mortgage Advisor and have been assisting clients with loans for the past 9 years. Let's chat about your specific situation to saee what you will qualify for. I can be reached at 610-291-1460 or

0 votes
Ty Dwyer, Agent, Richmond, VA
Wed Jun 2, 2010
I agree with Maria, 3.5% is the lowest, unless you find a homepath loan, which is usually offered for fixer upper properties, and can be as little as 3% down. If you are a doctor there are 100% loan programs still available, but they really scruitinize financials.

VHDA- don't know a lot about these loans but have heard they can do 100%

Also some loans are assumable, that may help lessen the burden of downpayment money.

Bottom line Google it.
0 votes
Maria Morton, Agent, Kansas City, MO
Wed Jun 2, 2010
For a conventional mortgage, 20% down is typical. If you put more down, your monthly payments are less. People with really really good credit ratings can get conventional loans for 15,10 or 5%.

For an FHA loan, 3.5% is needed plus a few other costs that will amount to around 2 or 3% of the price of the house. Some closing costs may be paid for by the seller.

Your realtor will help you find the right lender for you and go over the entire buying process with you.
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