Down Payments Demystified—Because Homeownership Shouldn’t Feel Out of Reach

Kimberly Smith
Apr 1
2 min read

What Is a Down Payment?

Your down payment is the amount of money you put toward the purchase of a home upfront. The rest? That’s typically covered by your mortgage loan.

So if you’re buying a $400,000 home and putting 5% down, your down payment would be $20,000.

How Much Do You Actually Need?

Here's the good news—you don’t always need 20% down (that’s a big myth)! Here’s a quick breakdown of common loan types:

FHA Loans: As little as 3.5% down
Conventional Loans: 3%–5% down for first-time buyers
VA Loans: 0% down for qualified veterans
Down Payment Assistance Programs: Some allow as little as $1,000–$3,000 out of pocket!

Every situation is different, and that’s why I always tailor recommendations to your needs.

What’s Included in the Down Payment Process?

When you’re preparing your down payment, here’s what’s involved:

Source of Funds – Lenders will ask where the money is coming from. It needs to be documented and legit (no suitcase full of cash 😅).
Verification – Bank statements or gift letters (we’ll talk about those next) are needed to verify your funds.
Deposit Timing – Usually, your down payment is due at closing, but part of it (like the earnest money) may be paid earlier.

Who Can Pay the Down Payment?

Good question—because you’re not always alone in this!

You, the buyer – Most common, and the easiest to document.
Family Members – Yes! Parents, siblings, or grandparents can gift you the down payment (lenders just need a gift letter).
Down Payment Assistance Programs – There are programs that offer grants or silent second loans to help cover your down payment.
Employers or Nonprofits – In rare cases, an employer or approved organization may contribute to your down payment.

⚠️ Heads up: There are rules depending on the loan type—so we’ll want to make sure it’s allowed and properly documented.

👑 Queen 5-Star Tip:

Don’t assume you can’t buy just because you don’t have a big down payment saved. I’ve helped buyers become homeowners with as little as $3,000 out of pocket—yes, really! Let’s look at your full financial picture and see what options are out there.

🎯 Final Thoughts

The down payment doesn’t have to be scary. With the right guidance, strategy, and support, you can walk into your new home confidently—without draining your savings.

If you’re thinking about buying but not sure where to start with your down payment, let’s chat. I’ll walk you through the process step by step and help you explore your options. Contact me to learn more or schedule a free buyer consultation.