A down payment is the initial amount of money you pay upfront when purchasing a home. It’s your stake in the property, while the rest of the purchase price is typically covered by your mortgage loan.

Example:

• Home price: $300,000

• Down payment: $30,000 (10%)

• Mortgage loan: $270,000

1. Reduces the loan amount you borrow.

2. Shows lenders you’re invested in the property, lowering their risk.

3. Impacts your monthly payment — the more you put down, the smaller your mortgage.

4. Can eliminate extra costs like mortgage insurance if you put enough down.

• Conventional loans: Often 3%–20%

• FHA loans: As low as 3.5% (with credit score requirements)

• VA & USDA loans: May require no down payment for eligible borrowers

• 20% Down Rule: Traditionally, putting down 20% means you avoid private mortgage insurance (PMI)

Larger Down Payment

✅ Lower monthly payments

✅ Lower interest rates possible

✅ Avoid PMI at 20% or higher

❌ Ties up more of your cash

Smaller Down Payment

✅ Easier entry into homeownership

✅ Keeps more cash available for savings, emergencies, or home repairs

❌ Higher monthly mortgage payments

❌ Often requires PMI or FHA Mortgage Insurance

👉 In short: The down payment is your first financial step into owning a home. The size of it affects your loan, your monthly payment, and your long-term costs.

House Keys is brought to you by

Mountain Retreat Realty Experts

https://mtnretreatrealty.com

House Keys is produced by Birdman Media™

This Episode is additionally supported by the support of the following sponsors

Buffalo Bills Tavern and Museum / Buffalo Nickel Brewery and Grill