First Time Home BuyersMortgageReal Estate April 8, 2024

Down payment? You’ve got options

If you are considering purchasing a home, it is likely that you have heard that you will need a down payment. If you are a first time home buyer, you might not fully understand your down payment options. We have connected with Michelle Schmidt from Movement Mortgage who has provided information to help you better understand. Keep reading for an explanation of down payments and your options as a buyer.

A down payment is an initial, partial payment made upfront when purchasing a home. It’s expressed as a percentage of the total purchase price, with the remaining amount financed through a loan.

Here’s a breakdown of down payments:


  • Reduces the amount you need to borrow.
  • Signals to the seller your seriousness about the purchase.
  • Influences your loan terms, like interest rates and mortgage insurance.

Typical amounts:

  • Homes: Usually between 3% and 20%, with 20% being ideal for avoiding private mortgage insurance (PMI). Not sure what PMI is, connect with us we will help you better understand.

Factors to consider:

  • Budget: How much can you comfortably afford to put down without impacting other financial goals?
  • Loan type: Some mortgages, like FHA loans, have lower minimum down payment requirements. Be sure to discuss which loan is right for you with your trusted lender.
  • Credit score: A higher score may qualify you for better loan terms, even with a lower down payment.

Benefits of a larger down payment:

  • Lower monthly payments: You borrow less, so your payments are smaller.
  • Lower interest rate: Lenders see you as a less risky borrower and may offer a lower rate.
  • Build equity faster: You own a larger portion of the property from the start.

Downsides of a large down payment:

  • Less available cash: You have less money for other needs or investments.
  • May delay purchase: Saving a large down payment can take time.

Some lenders, like Movement Mortgage offer down payment assistance programs for buyers who need a little extra help. Connect and see if it is a good option for you.

Feel free to ask if you have any specific questions about them or need help calculating how much you might need for a particular purchase.

If you are not currently working with a Realtor and would like to connect, reach out to us here.