What Is a Down Payment?

A down payment is the initial amount of money you pay upfront when purchasing a home. It is expressed as a percentage of the total purchase price and reduces the amount you need to borrow.

How Down Payments Work

For example:

Home price: $400,000
Down payment (10%): $40,000
Loan amount: $360,000

The larger your down payment, the smaller your loan amount.

How Much Down Payment Is Required?

Down payment requirements vary by loan type:

FHA loans may require as little as 3.5%
Conventional loans may require 3%–20%
VA loans may require no down payment

Benefits of a Larger Down Payment

Lower monthly payments
Reduced interest costs
Potential to avoid PMI

Explore Loan Options Based on Down Payment

Different loan programs offer varying down payment requirements.

Explore FHA loan programs or conventional loan options to compare.

Explore FHA Loan Options

FHA loans can be used for purchasing a primary residence and may also be considered when refinancing an existing mortgage.

To explore available options, visit FHA loan programs or compare with other financing solutions like home purchase loans .

Frequently Asked Questions

What is the minimum down payment?

It depends on the loan type and borrower qualifications.

Can I buy a home with no down payment?

Yes, some loan programs allow it for eligible borrowers.

Can I use an FHA loan to refinance?

Yes. FHA loans can be used for refinancing under certain conditions.

Related Terms

Let's Discuss Your Home Financing Options Today!

Ace Mortgage Loan Corporation provides quality mortgage services to the people of Broward and Palm Beach Counties. Call us today at (954) 777-4774 to get started!

(954) 777-4774

Down Payment