Down payment options when buying a house

Before you even think about buying your first home, make sure you are prepared.

When buying a home there’s a lot of information to absorb and learn. It can seem overwhelming, but starting with some of the basics and breaking the material into smaller details will make the process easier.

Start with these basic tips to make the experience a little less stressful.

First time buyer tips

Check your credit score

The number one thing to do before thinking about buying a home is knowing where your credit stands.

Your credit score is a three-digit number typically between 400 to 850 that banks and lenders use to determine if they’re willing to take a risk in lending you money.

The number is based on a variety of factors such as amount of debt you currently have from loans or credit cards, whether you pay bills on time and how long you’ve had some type of credit such as a credit cards, auto loans, etc. 

The higher the number, the better the score.

If your credit score is high, then you can rest easy and maintain status quo to keep the number the same.

Don’t make any large purchases or risk missing multiple payments in the meantime.

If your credit score is low, now is the time to take action to raise it.

Related: Credit Score needed to buy a house

Figure out how to chip away at unpaid debt and ensure that all future bills are paid on time. If you don’t have a long credit history, apply for a credit card and use it sparingly but enough to show that money borrowed will be repaid.

Lenders typically want to see a credit score of 620 to qualify for a home loan. Some lenders may go lower depending on the type of loan you apply for.

FHA loans are popular loans for first time home buyers and have lenient credit requirements.

VA loans are also great for first time buyers who are eligible and also has lenient credit qualifying factors.

Both these loan types are government loans and are easier to qualify for than a traditional conventional program.

Related: Conventional Loan Credit Score – The minimum requirements

Put a budget in place

If you don’t already have a budget, starting that process before shopping for a home is a good idea.

If you owe a lot of debt, that can negatively impact a credit score then setting a budget is one way to get on the right path to buy a home.

A budget is the first step toward putting money aside for a down payment and knowing how long it might take to save.

Setting a budget also helps you prepare for other home expenses beyond the mortgage.

Understand all the costs with home ownership

A home purchase isn’t just about the home’s purchase price and down payment. There are also loan closing costs that the buyer pays, then there a moving costs, and possibly repairs that need to be done to the home.


  • New furniture and décor
  • Maintenance like yard work or paint
  • Payments for new services like cable, trash, water, gas, heat, ac

All of these expenses need to be considered before buying a home.

Know the different types of home loans

Meeting with a loan officer early is one of the best ways to be prepared for knowing the different options for borrowing money.

There are government-backed loans like those from the Federal Housing Administration or Veterans Affairs office, or conventional loans which are the traditional loans, and then you have investment property loans, self employed loans, etc…

Even within these different loans there are variations, whether the loans have fixed rates, how long the loan will be, and how much money must be paid for a down payment.

First time buyers are often eligible for low-interest rate loans as long as the credit profile is healthy.

Getting pre-approved or learning how much mortgage you can afford each month will make a difference in determining how much down payment you need to save in order to purchase a home, and will guide you in how soon you’ll be able to reach that goal. 

Related: First Step is determing how much you can afford

Types of loans that Coole Home can help you with:

  • Conventional Loan – A loan option if you have a solid credit score. Sellers and realtors prefer this type of loan over any of the government programs that are available.
  • FHA loan – A popular home loan for first time home buyers due to it’s lenient guidelines and low down payment of 3.5%
  • VA home loan – perfect for veterans and active duty military members. Easy to qualify for and no down payment required.
  • Jumbo Loan – A mortgage program used to finance properties that are too expensive for a conventional conforming loan.
  • Bank Statement program– Great for borrowers who don’t want to provide their tax return for income quafifciation.

There are a lot of options available. If you are unsure about which program best suits your needs, a loan officer can help guide you.

Know the neighborhood that you want to buy in

Drive around various communities to get a feel for the neighborhood, whether people maintain their homes, or what amenities like parks or shopping might be nearby.

Sometimes less expensive options are available just a few miles away, or you may find a fixer-upper in a prestigious neighborhood.

Research things like schools and crime rates.

Know what type of home you want

As important as selecting the right neighborhood is selecting what kind of house you need.

Create a list of needs and wants.

Needs should be things that are necessary like a certain number of bedrooms and bathrooms.

Wants consist of things that might be nice to have like a pool or fenced backyard.

Narrowing your list to those needs can make a difference when house hunting and finding the right house at the right price.

You may learn that it’s worth sacrificing some of the things on your list of wants in order to get all the things you need at an affordable price. 

Also, make sure to be realistic. Speak with a realtor about your wants and needs and have them explain to you wether it is doable. You can also do your own research by looking at what is currently on the market.

For example – if you are looking to buy a house in San Diego that has 4 bedrooms and a pool for $400,000, well…that isn’t realistic at all!

A 4 bedroom house in San Diego is most likely upwards of $1million.

Find the right realtor

Meet with an agent who has a good feel for what’s available on the market and who understands what you’re trying to find in a home.

Get a recommendation for an agent from family or friends, or simply visit open houses and speak with agents in neighborhoods that you’re considering.

They’ll likely know other homes in the area and might have suggestions for similar areas to consider.

Are you ready to apply? Start the process by completing the form below.

  • Are you looking to buy or refinance a home?
  • What is your price range?
  • Do you currently own a home?
  • What type of property are you buying?
  • When are you planning to make your home purchase?
  • Have you (or your spouse) ever served in the US military?
  • Have you declared bankruptcy in the past 7 years?
  • Is this your first time purchasing a home?
  • What is your current credit score?
  • What is your email address?
  • What is your name?
  • What is your phone number?

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