According to a recent study, the down payment is the biggest obstacle to buying a home. Two-thirds of U.S. renters believe that saving for a down payment is the biggest hurdle to buying a home, according to the first Zillow Housing Aspirations Report.
Saving for a Down Payment
Many Americans incorrectly think they must have a 20% down payment and closing costs to buy a home. These costs could equal $45,000 or more, even in more moderately priced metros.
Some prospective homebuyers are unaware of zero down payment and low down payment options, which we discuss later. As a result, they believe homeownership is unobtainable, which is really not the case.
Though millennials are driving the housing market today, they are often challenged with saving for a down payment. Many millennials have difficulty finding a job after college while also paying student loans, car payments, and credit card debt.
Fortunately, recent changes by Fannie Mae and Freddie Mac have made it easier to qualify for a mortgage. Many borrowers who had difficulty qualifying for a mortgage earlier this year, now qualify.
So, here are some tips to save money for a down payment on a home:
- Learn how much you need to save by contacting your mortgage broker to be pre-approved for a mortgage.
- Budget your finances and keep records.
- Conserve on utilities and transportation.
- Save money by couponing and shopping for sales.
- Limit credit usage.
Zero Down Payment Mortgages
Borrowers eligible for a USDA or VA home loan can qualify for a zero-down payment mortgage.
USDA home loans are designed to help people with low- to moderate- incomes in rural communities become homeowners. These loans feature a zero-down payment and are based on the appraised value of the home rather than the purchase price, which allows borrowers to include some closing costs and/or repairs in the loan.
To be eligible for a USDA home loan, borrowers must meet income guidelines, and the home must be located in a qualified area.
Veterans, active-duty personnel, reserve members, National Guard members, and some surviving spouses can qualify for a VA home loan, which also features a zero-down payment.
A few of the many additional benefits of a VA home loan include:
- Negotiable and competitive interest rates.
- VA rules limit the amount borrowers can be charged for closing costs.
- Closing costs are comparable with other financing types and may be lower.
- The seller may pay closing costs.
- The right to prepay the mortgage without penalty.
- VA assistance to veterans in default, due to temporary financial difficulty.
Low Down Payment Mortgages
There are also several low down payment options for borrowers who do not qualify for a USDA or VA home loan, one of which is as low as 1%.
For many people, an FHA home loan with a 3.5% down payment is a good choice. And another option, especially for younger people, is a gifted down payment from a parent or grandparent.
Watch our video about low down payment mortgages. Mary Catchur explains many of the down payment options, along with some of the pros and cons.
Marimark Mortgage
Marimark Mortgage is based in Tampa, Florida, and serves the mortgage needs of homebuyers, homeowners, and investors in Florida, Virginia, and Pennsylvania.
We specialize in mortgages for first-time homebuyers, conventional home mortgages, refinance loans, reverse mortgages, and FHA, VA, and USDA mortgage options. In addition, we’ve worked extensively with cash-out refinancing and help clients to lower their monthly mortgage payments.
To get started with a mortgage to buy your next home, please fill out our Quick Mortgage Application or contact us.

The Marimark Mortgage Newsletter will keep you informed with important events in the mortgage industry that could impact your finances.
We especially focus on ways to save money on your current and future mortgages. And, we continually share the information we share with our clients, because we believe informed consumers are the best consumers.
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