What a smaller down payment changes
The down payment is only one part of your cash budget. Separately plan for closing costs, prepaid expenses, reserves when required, and money left for repairs or a move. HomeReady has income, property, and other eligibility conditions; 3% down is not available to every borrower or every purchase. Fannie Mae — HomeReady ↗
Compare the whole monthly payment
Ask for two written scenarios using the same purchase price and lock assumptions. Include principal, interest, mortgage insurance, property tax, homeowners insurance, and any association dues. A larger down payment reduces the starting balance, but preserving a cash cushion may matter to your household too.
Before making an offer
Bring your available funds and target monthly budget to the conversation. Ask which program supports the proposed down payment, whether gifts are allowed, and how much cash remains after closing. A planning calculation does not establish that a lender has approved the loan.
PUT IT INTO PERSPECTIVE
An example, not an offer
Illustration only: 3% of a $600,000 purchase is $18,000, leaving a $582,000 starting loan before any financed charges. That $18,000 is not the total cash to close. At 20% down, the down payment would be $120,000. Neither scenario is a loan offer.
Plan cash to close →Related questions
Check the original guidance
Requirements and availability can change. Confirm the program and lender terms for your application.