How Much Down Payment do You Need to Buy a Home

When purchasing your new and first home, it can be a big problem saving for a down payment. Depending on the type of commercial hard money loan you want, the amount of down payment to be put down may differ. Your credit score will also affect the down payment.

last updated Wednesday, May 17, 2023
#Conservative Loan #Housing Administration

John Burson     Subscribe
How Much Down Payment do You Need to Buy a Home


Conservative loan

A conventional 30-year mortgage that is fixed for 30 years used to ask for a 20% down payment for a mortgage. However, in the current market, that is not necessary. Most loans will require a 5 to 10 percent down payment.

If you put 20 percent down payment, you must pay for private mortgage insurance. This is a tool that commercial hard money lenders use to guard themselves against losing money. Borrowers with smaller down payments are a greater risk than those with higher down payments. The commercial hard money lender will then use your commercial hard money loan to retain it just in case you default. Therefore you will be the one compensating for the premium.

Federal Housing Administration (FHA)

This is there to help middle to lower-revenue buyers secure mortgages. They don’t offer the loan, but they do insure it. It requires a 3% down payment. However, there are guidelines. To meet these requirements, the borrower's or the buyer’s credit score is vital.

Veteran’s Administration (VA)

They offer mortgages up to $417,000 without a down payment or mortgage insurance. However, if you need a commercial hard money jumbo loan, you will have to put a payment on the amount borrowed over a limited number. The federal government backs these loans for veterans who meet the requirements.

Commercial hard money lenders

Commercial hard money lenders usually ask for huge down payments, usually 35%. Commercial hard money loans are good options for borrowers with a poor credit history or self-employed. These loans are always risky because there is no income or good credit score. They ask for huge down payments keeping in mind that they are doing business.


These are loans that require no down payment. You will even get a higher interest rate in exchange. When it adjusts, this may be too expensive. This type of loan is suitable for someone who can repay in the future.


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