{"id":15390,"date":"2025-09-16T02:00:12","date_gmt":"2025-09-16T09:00:12","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=15390"},"modified":"2025-09-16T21:54:07","modified_gmt":"2025-09-17T04:54:07","slug":"buyer-what-is-a-down-payment","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/buyer-what-is-a-down-payment\/","title":{"rendered":"What Is a Down Payment and How Does It Work?"},"content":{"rendered":"

You\u2019ve no doubt heard the phrase \u201cno money down!\u201d on a late-night infomercial \u2014 but what exactly does that mean? It means that you\u2019ll finance 100% of the purchase price of the item in question, without paying any of your money upfront to own it. While this is an option at some car dealerships, it\u2019s rarely an option with a house.<\/p>\n

For first-time homebuyers<\/a> especially, understanding the down payment can be a big hurdle to clear before you can buy a house. Someone may have told you that you must have 20% of the home\u2019s purchase price, and that amount looks ridiculously large. You have no idea how you\u2019ll save up that much money, and you wonder if you have other options.<\/p>\n

There are many misconceptions out there about homebuying related to two simple questions \u2014 what is a down payment? And how much money do I need to buy a house?\u00a0<\/a><\/p>\n

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How Much Should You Put Down on a House?<\/h3>\n

Estimate how much you should put down on a home and learn more about the loan options that work best for you with HomeLight’s Down Payment Calculator.<\/p>\n \n

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What is a down payment?<\/h2>\n

If you\u2019re borrowing a large sum of money to purchase something, it\u2019s common for lenders to ask for a down payment. A down payment is money that you pay toward the larger purchase price, and then the rest of the purchase is financed. If you\u2019ve bought a car or a major appliance, you probably had to put down money before they would approve your loan.<\/p>\n

Vince Grant<\/a>, an agent in Everett, Washington<\/a>, with 36 years of experience, says that lenders want to see a down payment because \u201cthe more skin in the game the borrower has, the less risk of default the lender has.\u201d Along with your credit score<\/a>, it tells the lender that you know how to save and manage money, which decreases your risk of default.<\/p>\n

A down payment is usually expressed as a percentage: 3%, 10%, or 20% of the total purchase price, for example. You must have this money available to pay upfront, and then the lender will loan you the remaining balance owed on the house. To see how much you might need, try our down payment calculator below:<\/p>\n