Published February 29, 2024.
Written by Reno Perry.

How Much $ Do You Really Need to Put Down on a House?

As a real estate agent serving the vibrant Glendora community in Southern California, I often hear the question, "How much do you really need to put down on a house?" There’s a variety of different factors that weigh on this - let’s dive in.

Also check out our article we published: How Do I Choose the Right Mortgage for Me?

The Myth of 20 Percent Down

You may have heard the common advice that a 20 percent down payment is the norm. However, in reality, most first-time homebuyers find themselves comfortably within the 3 to 5 percent range of the purchase price. This range makes homeownership far more accessible and less daunting than the traditional 20 percent down.

”California homebuyers have more borrowing power than ever, as the Federal Housing Administration (FHA) backs loan amounts as high as $472,030 for single-family homes. Buyers looking for a one-unit home in more expensive California counties like Los Angeles may qualify for an FHA loan amount as high as $1,089,300.” (via lendingtree)

Below is the average selling home price from February 2023-2024, paired with how much an FHA down payment of 3.5% would be if you qualified.

Glendora Selling Price: $831,250
FHA Down Payment: $29,093

La Verne Selling Price: $925,000
FHA Down Payment: $32,375

Monrovia Selling Price: $935,000
FHA Down Payment: $32,725

Duarte Selling Price: $730,000
FHA Down Payment: $25,550

San Dimas Selling Price: $865,000
FHA Down Payment: $30,275

Covina Selling Price: $734,000
FHA Down Payment: $25,690

Pomona Selling Price: $630,000
FHA Down Payment: $22,050

Rancho Cucamonga Selling Price: $733,523
FHA Down Payment: $25,673

Los Angeles County Selling Price: $861,302
FHA Down Payment: $30,145

(Home price data via Rocket Homes)

Don’t guess any longer. Use this US Bank FHA Loan Calculator to find out how much the house you’re looking at could actually cost.

Exploring Alternative Options

What's even more encouraging is that some buyers may not need to come up with any money for a down payment. Various programs and initiatives exist to assist with down payments and closing costs, making homeownership a reality for more individuals and families.

The Importance of Individual Circumstances

Determining the right down payment for you involves assessing your unique circumstances. While qualifying for a higher amount may seem appealing, it's crucial to consider your lifestyle and comfort level with the resulting mortgage payment. Your ideal down payment should align with your financial goals and long-term plans.

Who Can Help You Navigate?

If you're considering purchasing your first home, you might wonder who to turn to for guidance. The first person you should speak with is someone you trust within the real estate industry. A knowledgeable real estate agent can connect you with reputable lending professionals who will make the process comfortable and transparent.

For more information on how to choose the right mortgage but more importantly a qualified lender, see our article: How Do I Choose the Right Mortgage for Me?

Building Relationships for Success

In the real estate journey, relationships matter. Seek out professionals who prioritize building a rapport with clients and are committed to guiding you through the process, whether you're ready to buy now or planning for the future. A trusted lender can help you understand where you stand financially and outline steps to achieve your homeownership goals.

Conclusion

In conclusion, the amount you need to put down on a house varies based on your individual circumstances and goals. While the traditional 20 percent down payment exists, it's not the only option available. By working with experienced real estate agents, lenders, and exploring alternative programs, you can find a path to homeownership that suits your needs.

Remember, the journey to homeownership begins with a conversation. Reach out to a real estate agent you trust to start exploring your options, getting prequalified, and taking steps toward making your homeownership dreams a reality in sunny Southern California.