If you're thinking about buying a home in Golden, Colorado, you may assume you need 10%, 15%, or even 20% down before you can start looking.
You may need a lot less than you think.
Depending on the loan program and your qualifications, you may be able to buy a home with as little as 3% down with conventional financing or 3.5% down with an FHA loan.
And for some Colorado buyers who qualify for down payment assistance, the amount they need to bring from their own savings may be even lower.
Buying a Home With 3% Down
There are conventional mortgage programs that allow qualified buyers to finance up to 97% of the home's purchase price.
For example, Fannie Mae's HomeReady® program offers down payments as low as 3% for eligible borrowers. Freddie Mac also offers low-down-payment options, including Home Possible® and HomeOne®.
Let's put that into actual dollars.
If you purchased a $600,000 home in Golden, a 3% down payment would be:
$18,000
On a $700,000 home, 3% would be:
$21,000
That's very different from the $120,000 or $140,000 someone might think they need if they assume a 20% down payment is required.
Keep in mind that the down payment isn't the only cost involved in purchasing a home. Buyers may also have closing costs, prepaid taxes and insurance, and other expenses associated with the transaction.
That's why I prefer to look at the entire picture rather than simply quoting a down-payment percentage.
What About an FHA Loan With 3.5% Down?
FHA financing is another option I frequently look at with Colorado homebuyers.
FHA loans allow qualified borrowers to purchase with a minimum 3.5% down payment.
On a $600,000 home, 3.5% is $21,000.
On a $700,000 home, 3.5% is $24,500.
FHA financing can be especially helpful for buyers whose credit profile or debt-to-income ratio makes FHA a better fit than conventional financing.
FHA isn't automatically "better" or "worse" than conventional financing. They're simply different tools.
When I'm working with a buyer, I'll compare the options and run the numbers so we can determine which financing strategy makes the most sense for their particular situation.
You May Not Have to Save the Entire Down Payment Yourself
This is another misconception I hear all the time.
Depending on the mortgage program, buyers may be able to use acceptable gift funds, grants, or down payment assistance toward their purchase.
Colorado also has homeownership programs that can help eligible buyers with down payment and/or closing costs.
This is why I encourage buyers to reach out to me before deciding they don't have enough money to buy a home.
I can look at your specific situation, walk you through the programs you may qualify for, and show you what your actual down payment and cash-to-close could look like.
I've seen buyers wait because they thought they needed tens of thousands of dollars more than they actually did.
Don't Forget About Seller Concessions
The down payment is only part of the equation.
In some transactions, buyers may be able to negotiate seller concessions that can be applied toward allowable closing costs or, depending on the structure of the transaction, an interest-rate buydown.
That can make a meaningful difference in how much cash a buyer needs at closing.
The amount a seller can contribute depends on the loan program, down payment, and other factors, so this is something I review as part of the overall financing strategy.
Is Putting Only 3% Down a Bad Idea?
Not necessarily.
Putting more money down can reduce your loan amount and monthly payment, and in some cases it can reduce mortgage insurance or improve loan pricing.
But putting every dollar you have into your down payment isn't always the best strategy either.
You may want money available after closing for an emergency fund, moving expenses, furniture, repairs, or simply life.
When I work with buyers, I'll often compare several options side by side:
3% down vs. 5% down vs. 10% down
Instead of focusing only on the down payment, we'll look at your monthly payment, cash needed to close, and how much savings you'll have left after closing.
Sometimes the results surprise people.
What If You're a First-Time Home Buyer in Golden?
There may be even more options available.
First-time buyers may qualify for conventional low-down-payment programs, FHA financing, and Colorado down payment assistance programs.
And here's something many people don't realize:
You don't necessarily have to be buying your first home ever to be considered a first-time home buyer under certain mortgage programs.
Some programs define a first-time home buyer as someone who hasn't owned a principal residence during the previous three years.
That's another reason not to rule yourself out before checking.
So, Can You Really Buy a Home in Golden with 3% or 3.5% down?
Yes, qualified buyers can.
The bigger question is whether 3%, 3.5%, 5%, 10%, or another strategy makes the most sense for you.
Buying a home in Golden isn't inexpensive, and the financing strategy matters.
My job isn't simply to get you a mortgage. It's to help you understand the numbers, compare your options, and structure your financing in a way that makes sense for your situation.
Curious What Buying a Home in Golden Would Look Like for You?
You don't have to guess.
Reach out and I'll run the numbers at different purchase prices and show you estimated cash to close, monthly payment and down-payment options so you can see what buying a home in Golden could actually look like for you.
We can start with a soft credit pull, so exploring your options doesn't have to begin with a hard inquiry.
Alicia Kirby
