Compare cash left over, not just the smallest down payment
Write down the money you want available after closing before deciding how much to put down. Moving expenses, an immediate repair and a gap between paychecks compete for the same cash. Compare two down-payment scenarios at the same purchase price and keep those reserves visible.
Ask each lender to identify which costs are estimates and which are tied to the property. Two cash-to-close totals can differ because one uses lower tax or insurance assumptions, even when the loan itself is not cheaper. Have those assumptions aligned before choosing.
Start with a price you are considering
Here is the math for a $700,000 home. This is an example price, not a statement about current local listing prices. The loan amounts below exclude any financed fees.
| Down payment | Cash toward price | Starting loan amount |
|---|---|---|
| 3% | $21,000 | $679,000 |
| 5% | $35,000 | $665,000 |
| 10% | $70,000 | $630,000 |
| 20% | $140,000 | $560,000 |
A smaller down payment may be possible
Fannie Mae’s HomeReady program allows as little as 3% down for eligible borrowers. Income, property, education, and other program requirements apply. Availability also depends on the lender and your complete application.
A larger down payment reduces the amount borrowed. A smaller one may preserve cash for moving, repairs, and reserves. Compare the total monthly payment, mortgage insurance, and cash remaining after closing before choosing.
Your down payment is only part of cash to close
Ask for a written estimate that separates your down payment, loan costs, other closing costs, prepaid items, and initial escrow deposit. Subtract any deposits or credits that actually apply. The Loan Estimate provides a place to compare those figures.
For example, if you plan $35,000 down and estimate $12,000 in other cash needed, your starting budget is $47,000 before adjusting for deposits and credits. The $12,000 is an illustration, not a quote for your transaction.
Three useful questions for your next conversation
- Which programs fit my income, property, credit profile, and available funds?
- What would the monthly payment and cash to close look like at two different down payments?
- After closing, how much should I keep available for my own household budget?
A few common questions
Some eligible buyers can use a lower down payment. Compare program eligibility, mortgage insurance, monthly payment, and total cash needed with your loan officer.
No. The table shows only the amount applied toward the purchase price. Closing costs, prepaid items, reserves, and any credits need their own estimate.
YOUR NEXT DECISION
Turn this answer into a plan.
What should I prepare before shopping?
Start with a comfortable payment, cash available after closing and the documents your lender needs. Then connect the loan options to the property you are considering.
Read the original sources
Program rules and lender requirements can change. Confirm current terms before acting.