Purchase Price
The price of the home is only the starting point. Your down payment, loan structure, taxes, insurance and other costs determine what the purchase actually looks like financially.
First-time homebuyers
Buying your first home shouldn't feel like learning a new language.
Down payment, closing costs, mortgage insurance, preapproval, interest rates and monthly payments all affect the decision. The goal is to understand the numbers before you start making offers.
Start with the numbers. Then build the financing strategy around your goals.
Start here
The four numbers to understand first
Before comparing houses, it helps to understand how the financing math actually works.
Down Payment
A larger down payment can reduce the loan amount and monthly payment, but putting more cash down isn't automatically the best financial decision.
Compare Down PaymentsMonthly Payment
Your housing payment can include principal, interest, property taxes, homeowners insurance, mortgage insurance and HOA dues.
Calculate a PaymentCash to Close
Your down payment isn't the same thing as your total cash needed to close. Closing costs, prepaid expenses and other transaction costs may also need to be considered.
How much should you put down?
The biggest down payment isn't always the best strategy.
Putting more money down generally reduces the amount you borrow and may reduce the monthly payment. But preserving cash can also matter — especially for emergency reserves, investments, home improvements or other financial goals.
Down-payment options vary by borrower, property and loan program. Not every program allows every down-payment percentage.
The question most buyers ask
“How much can I put down?”
The more useful question
“How should I allocate my cash for this purchase?”
PMI explained
Less than 20% down doesn't automatically mean it's a bad deal.
Private mortgage insurance may apply to certain conventional loans when the down payment is below 20%.
PMI allows some buyers to purchase without waiting until they have accumulated a 20% down payment.
The actual cost varies based on borrower and loan characteristics.
The trade-off
Waiting to save a larger down payment may reduce mortgage insurance, but it can also delay the purchase and require more cash upfront. Compare the complete financial picture.
Closing costs
Down payment and cash to close are not the same thing.
Beyond the down payment, buyers should plan for potential transaction costs. Not every fee applies to every transaction, and amounts vary.
Your exact cash-to-close figure depends on the property, loan structure and transaction.
- Lender-related costs
- Appraisal
- Title and escrow/settlement services
- Recording charges
- Prepaid homeowners insurance
- Prepaid property taxes, when applicable
- Initial escrow funding, when applicable
- Other transaction-specific costs
Preapproval
Get the financing strategy clear before you start writing offers.
Preapproval is a review of your financial picture that helps evaluate what a purchase could look like. It is not a final loan approval or a commitment to lend.
Check Your Debt-to-IncomeA preapproval review may evaluate
- Income
- Assets
- Credit
- Debts
- Potential loan structure
- Estimated purchase range
First home purchase process
Five steps. No guesswork.
Clear guidance from the first conversation through closing.
01
Understand the numbers
Review your budget, available cash, estimated monthly payment and potential financing options.
02
Build the financing strategy
Compare down payment, loan structure and cash-reserve tradeoffs.
03
Get preapproved
Review the financial documentation needed to prepare for an offer.
04
Make the offer
Coordinate the financing with the purchase contract and transaction timeline.
05
Move from contract to closing
Complete underwriting, appraisal and final loan requirements through closing.
Start with the numbers
Know what the purchase looks like before you fall in love with the house.
Run the numbers yourself or schedule a conversation to compare financing strategies.