Buyer guide

How much do you really need
for a down payment?

The twenty percent rule is the most expensive myth in real estate. Most buyers in Central Texas put down far less, and plenty of them close without touching their savings as hard as they expected.

What the common loan types ask for

• Conventional: as little as 3% down for many first-time buyers, 5% is common otherwise. Under 20% you pay private mortgage insurance, which drops off once you have enough equity.
• FHA: 3.5% down with lower credit score requirements. Mortgage insurance works differently here and often stays for the life of the loan.
• VA: zero down for eligible service members and veterans, with no monthly mortgage insurance. In a military town like San Antonio this is the loan a lot of buyers overlook.
• USDA: zero down in qualifying rural areas, and parts of the Hill Country surrounding New Braunfels and Canyon Lake do qualify. Income limits apply.

Down payment is not the only cash you need

Budget separately for closing costs, the option fee and earnest money, the inspection, the appraisal, and your first year of insurance and taxes if the lender escrows them. Ask your lender for a written estimate of total cash to close, not just the down payment, before you start touring.

Assistance programs exist and are underused

Texas has statewide down payment assistance programs, and some cities and counties run their own. They typically come with income limits, a required homebuyer education course and occupancy requirements, and some are forgivable over time. Not every lender offers every program, so ask specifically.

Does a bigger down payment win the house?

Sometimes, but less than people think. Sellers care about certainty: a solid pre-approval, a reasonable option period, financing that will survive an appraisal, and a buyer who can close on time. A well-structured offer with 5% down beats a shaky one with 20%.

What to do first

Talk to a lender before you talk yourself out of buying. Twenty minutes gets you a real number, and most people find they are closer than they assumed. Then I build the search around what you can comfortably carry, not the maximum you were approved for.

Buying representationProperty taxes explained

This article is general information, not legal, tax, financial or insurance advice. Rules, rates and local ordinances change — confirm the details with your lender, insurance agent, title company, city or county, or a qualified professional.