What Is a Down Payment and How Does It Work?

By The Lending Mamba – Helping You Secure Smarter Home Financing – What Is a Down Payment
📞 657-777-0024 | 🌐 thelendingmamba.com | 📧 Info@thelendingmamba.com

What Is a Down Payment?
A down payment is the initial lump sum you pay upfront when purchasing a home. It’s your first stake of ownership in the property and represents a portion of the total home price. The rest of the cost is typically covered through a mortgage loan.

For example, if you’re buying a $500,000 home and put down 10% ($50,000), you’ll finance the remaining $450,000 through a mortgage.

Why Is a Down Payment Important?
Reduces Your Loan Amount
A larger down payment lowers the total loan amount, which can mean lower monthly payments and less interest over time.

Helps You Avoid PMI (Private Mortgage Insurance)
If you put down at least 20%, you typically don’t have to pay for PMI, which protects the lender but increases your monthly costs.

Strengthens Your Loan Application
A substantial down payment can make your mortgage application more attractive to lenders by reducing their risk.

How Much Do You Need to Put Down?
The required down payment depends on the loan type:

Conventional Loan – Typically 3% to 20%

FHA Loan – As low as 3.5%

VA Loan (for Veterans) – 0% down

Jumbo Loans – Often require 10% to 20%

At The Lending Mamba, we help you choose the right loan program based on your budget and long-term goals.

Where Can Down Payment Funds Come From?
You can fund your down payment using:

Personal savings

Gift funds from family

Retirement account withdrawals (some penalties may apply)

Down payment assistance programs (varies by state and lender)

Down Payment vs. Closing Costs
Your down payment is separate from your closing costs. While the down payment goes toward your home’s purchase price, closing costs cover loan processing fees, title charges, and other services.

Final Thoughts
A down payment plays a major role in the home buying process, and understanding how it works helps you make confident financial decisions. Whether you’re a first-time buyer or looking to upgrade, The Lending Mamba is here to guide you every step of the way.

Let’s Talk Home Financing
📲 Call us today at 657-777-0024
🌐 Visit us: thelendingmamba.com
📧 Email: Info@thelendingmamba.com

Let The Lending Mamba help you find the perfect mortgage plan—with the right down payment—for your future home!