How Much Down Payment Do You Need to Buy A Home

California is one of the most desirable and beautiful places to live in the U.S.A. With beaches, mountains, deserts, and forests, one can find an idyllic place to call home in the Golden State. If you're a first-time homebuyer looking to buy in Southern California, you'll want to start by determining how much you can afford. This article will share what you need to know about down payment and affordability.

Determining Your Down Payment 

Your down payment is a significant factor affecting how much house you can afford in LA, Orange County, or Riverside County.

Ideally, you'll want to put down 20% of the home's total value as a down payment. However, if you can't afford a 20% down payment, there are alternatives you can try. Here are some of the most popular:

  • Buy mortgage insurance. You may be able to get a fixed-rate conventional loan where you only put 3% down as long as you pay for PMI.
  • If you're a veteran or active member of the military, apply for a Veteran Home loan. A VA loan provides loans with 0% down.
  • Apply for a federally-backed loan such as an FHA loan. The FHA grants borrowers lower-rate mortgages with as little as 3.5% down.

Want to crunch the numbers? Che out our Rancho Vista Mortgage down payment calculator. This nifty tool helps you to calculate your payments --including taxes-- to help you determine how much home you can buy.

You'll reap the benefits if you can afford to put 20% down!

A 20% down payment is generally seen as the ideal down payment amount by most lenders and loan types. Here are some of the perks of putting down 20%. 

Lower Interest Rates

Because of your higher down payment, you'll relieve some of the financial risks to lenders. In that case, you'll get access to lower interest rates.

Eliminate Private Mortgage Insurance

For the same reason mentioned above, putting 20% down means you won't be required to pay for private mortgage insurance. This can Lower your monthly mortgage payment substantially. 

Lower Monthly Payments

When you have a larger down payment, less money will be borrowed for your mortgage loan. Borrowing less means that your monthly mortgage payments will be less too. 


There are numerous benefits to putting down 20% as a first-time homebuyer for your California home, but if that's too much, you can always turn to low-down payment loans like an FHA loan or a zero-down loan from the VA.

Want to discuss this in further detail? We'd love to help! Contact us today and Rancho Vista Mortgage to explore all your options. 

* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.