Home Down Payments – What You Need to Know

Buying a home can seem overwhelming and you probably have a lot of questions if you’re a first-time buyer. Communication Federal Credit Union is here to help with you and provide guidance so that you can be an informed buyer. This post has information on one of the hottest topics – down payments.

When buying a home, you will typically need a down payment. How much you’ll need typically depends on the type of loan. Below is more information for the most common loan types.

  • FHA Mortgages, also referred to as government-backed mortgages, usually require a lower down payment of only 3.5%, but have an upfront charge for mortgage insurance in addition to a monthly mortgage insurance premium. If you don’t have a great deal of money saved for a down payment, FHA loans can help you get into your dream home more quickly, but you’ll usually have a higher monthly payment and larger up-front closing costs.
  • Traditional Mortgages usually require a down payment of between 5 and 20 percent. Although the down payment is higher, your loan closing costs will typically be lower than a government-backed or FHA mortgage. Expect to pay mortgage insurance, or PMI, if your down payment is less than 20%. A higher down payment and lower closing costs result in lower monthly payments.
  • Down Payment Assistance programs are sometimes available to first-time homebuyers to lower the costs of getting into a home. These programs can be very helpful, but often have some qualifications or restrictions that you will want to research further. Funds aren’t always available, but you can time your purchase to take advantage of these programs. Your lender will be able to provide more information on these programs, which can often be helpful for first-time buyers.
  • What is Mortgage Insurance or PMI? Mortgage insurance or PMI protects the lender from losses on loans with greater risk, typically because of low down payments. Borrowers pay this expense so that lenders will take the risk of the loan and help them into a home more easily.

Home Price

3.5% Down Payment

5% Down Payment

10% Down Payment

20% Down Payment
















Certain closing costs are usually the responsibility of the homebuyer, in addition to the down payment.

CFCU offers a variety of mortgage products to fit your individual need and budget. Our team of mortgage professionals is available to help you decide which product is best for you. Email mortgage@comfedcu.org or call 405.879.5654 with any questions or to apply.