Buying a home isn’t just about finding the right house—it’s about being financially prepared. Here are some hard truths, especially when it comes to down payments and assistance programs:
1. Down Payment Assistance Isn’t Always “Free Money”
Many first-time buyers think down payment programs are free, but some come with:
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Higher interest rates than regular loans
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Repayment requirements (some are loans, not grants)
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Residency restrictions (you might have to stay in the home for a certain number of years)
2. You Still Need Cash on Hand
Even with down payment assistance, you’ll likely need money for:
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Earnest money (a deposit to show you’re serious)
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Closing costs (2-5% of the home price)
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Moving expenses & initial repairs
3. FHA & Low-Down Payment Loans Have Trade-Offs
Loans like FHA (3.5% down) or conventional (3-5% down) are great options, but they come with:
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Higher monthly payments (since you borrow more)
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Private mortgage insurance (PMI), which adds to your costs until you reach 20% equity
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Property condition restrictions, meaning you might not qualify for a fixer-upper
4. The More You Put Down, the Less Risky You Are
A bigger down payment means:
✅ Lower monthly mortgage payments
✅ Better interest rates
✅ More equity upfront (which protects you in case the market dips)
If possible, aim for 10-20% down to avoid PMI and secure better loan terms.
5. Your Credit Score & Debt Matter—A Lot
Lenders look at:
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Credit score: 620+ for conventional loans, 580+ for FHA, but 700+ gets you the best rates
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Debt-to-income ratio (DTI): If your monthly debts (credit cards, car loans, etc.) are too high, you may not qualify, even if you have a down payment
6. The Market Doesn’t Care About Your Feelings
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Homes are competitive—you might lose out on multiple offers before you win
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Sellers favor buyers with stronger financing, not just the highest offer
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If you wait too long, interest rates or prices could go up, making it harder to buy later
7. Homeownership Is More Expensive Than You Think
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Maintenance and repairs can add 1-2% of your home’s value per year
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HOA fees can increase
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Property taxes can go up over time
Bottom Line
Buying a home is doable, but be financially prepared beyond just the down payment. If you’re relying on assistance, read the fine print and have backup savings.
Would you like help finding specific down payment programs?