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How To Save for a Down Payment

Aspiring homeowners often face one major hurdle when purchasing a house: saving for a down payment. With the rising housing costs and other expenses, putting away a significant amount of money can seem daunting. But with some planning and dedication, saving enough for a down payment on your home is possible. In this article, we’ll explore how to save for a down payment on a house, specifically when it comes to conventional loans, FHA loans, and VA loans.

Percentage and house on white desk.

Conventional Loans

A conventional loan is not backed by the government. Since there is no government backing, the lender is taking on greater risk by lending money to the borrower. Because of this, conventional loans typically require a higher down payment than government-backed loans. However, conventional loans offer more flexibility regarding loan amounts. They can be a good option for those with a strong credit history and stable income.

So, how much down payment do you need for a conventional loan? It depends on the lender and the loan program, but generally, a down payment of at least 5% is required. If you put down less than 20%, you are required to obtain private mortgage insurance (PMI), which protects the lender against financial loss in the event you default on the loan.

Here are tips on how to save for a down payment on a conventional loan:

  1. Set a savings goal: Determine how much you need to save for your down payment and set a timeline for achieving that goal. Knowing this will help you stay motivated and on track.
  2. Create a budget: Look at your monthly expenses and find areas to cut back. Consider downsizing your living space, cooking more meals at home, and reducing entertainment expenses.
  3. Increase your income: Seek out ways to increase your revenue, such as taking on a side job or asking your employer for a raise at your current job.
  4. Automate your savings: Set up automatic monthly transfers from your various accounts to your savings account. This automation will ensure that you are consistently putting money away.

FHA Loans

Backed by the Federal Housing Administration, are the flexible FHA home loans. These loans are typically more accessible to first-time homebuyers and require a down payment of at least 3.5%. They also have more flexible credit requirements than conventional loans. However, FHA loans require you to pay mortgage insurance premiums (MIP), which can increase your monthly payment.

VA Loans

A VA loan is a mortgage the Department of Veterans Affairs (VA) guarantees. These loans are available to veterans, active-duty service members, and eligible spouses. In most cases, VA loans do not require a down payment; you must pay a funding fee unless you are an exempt (disabled) veteran. The funding fee is variable depending on your military status, the amount of your down payment, and other factors.

Down payment assistance programs

Then of course there are down payment assistance programs available that can help you save money on your down payment. State or local government agencies as well as nonprofit organizations typically offer these programs. They can provide you with grants, loans, or other assistance to help you cover your down payment and closing costs.


In conclusion, saving for a down payment on a home may seem daunting. Still, it is achievable with the proper planning and strategy. Creating a budget, opening a dedicated savings account, considering a side hustle, exploring loan options, and considering down payment assistance programs can all help you reach your goal of homeownership. Remember to be patient and persistent in your efforts, and don’t be afraid to ask for help or guidance. At USA Lending, we are here to support you on your journey to homeownership. Reach out to us with your questions by clicking here.


Author Bio: Greg Sandler
Greg Sandler is a distinguished leader and strategist in the mortgage and real estate investment industry. With over two decades of experience, Greg has honed his expertise in guiding his clients to build wealth through real estate.

Greg Sandler has direct and first-hand experience as co-founder and CEO of USA Investment Group Management Inc., focusing on growing real estate holdings and diversified asset portfolios. Under Greg's guidance, the company has executed hundreds of traditional real estate acquisitions and currently manages a substantial portfolio of rental units.

Greg also has a track record of driving multi-million-dollar revenues and leading high-performing teams to success in mortgage loan originations, achieving the prestigious "Top 1% Originator" status in consecutive years. Currently steering the helm as the President at USALending.AI in Keller, TX, Greg has revitalized this division of a mortgage bank, significantly expanding the company's scale.

Prior to this, Greg's role as Senior Vice President at Fairway Independent Mortgage Corp in Rocklin, CA, was marked by his pivotal contribution in establishing the company's presence in northern California and northern Nevada. Under Greg's leadership, his team of nearly 110 dedicated mortgage professionals originated and funded approximately $800 million in residential mortgages annually.

Greg's professional journey is marked by his exceptional skills in negotiation, sales leadership, financial analysis, and P&L management. His ability to strategize, coupled with his in-depth knowledge of the mortgage and real estate sectors, makes him a visionary leader and a respected figure in the industry.

To book a call with Greg Sandler, please visit:

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