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What to do if lender requires 25% down payment on home

My mortgage lender is requiring a 25% down payment. Can I qualify for a second mortgage or grant for my down payment?

Michael Jensen, Mortgage and Finance Guru
, Mortgage and Finance Guru

We provide several resources on FREEandCLEAR that address your questions including an overview of how second mortgages work, our summary of low / no down payment mortgage programs and our overview of down payment assistance programs. I have outlined these resources below and encourage you to review these materials so you can understand how to buy a home with little or no down payment. Additionally, a required down payment of 25% is higher than normal so we recommend that you contact additional lenders to determine if you can find a mortgage with better terms.

1) How Second Mortgages Work.  We provide a thorough overview of second mortgages on FREEandCLEAR including how to use a second mortgage to buy a home. Second mortgages can be challenging to qualify for and may increase your total monthly housing expense so we also recommend reviewing low / no down payment mortgage programs and down assistance grants as home financing alternatives.

2) Low / No Down Payment Mortgage Programs.  Instead of getting a second mortgage, a low or no down payment mortgage program may be a better financing option for you. These programs enable you to buy a home with a down payment between 0% and 3.5% which means you would not have to obtain a second mortgage, potentially saving you money and time. We provide a comprehensive summary of low / no down payment mortgage programs on FREEandCLEAR as well as an insightful comparison of these programs. Each program has different eligibility and borrower qualification guidelines so I recommend that you review these resources to better understand how the programs work.

3) Down Payment Assistance Programs.  These programs can help home buyers pay for all or part of their down payment. We provide a thorough overview of Down Payment Assistance Programs on FREEandCLEAR. Borrowers can combine a down payment assistance grant with a low down payment mortgage program to buy a home with minimal personal financial contribution. Down Payment Assistance Programs are typically provided by HUD-approved local housing commissions. The housing commission may also offer additional home buyer assistance programs to help you make your down payment, pay for closing costs and buy a home.

4) Compare Lenders.  As I mentioned above, a 25% down payment requirement is higher than usual so we recommend that you shop multiple lenders to better understand your financing options. You can contact lenders in your area by clicking INTEREST RATES We advise you to contact three-to-four lenders as comparing proposals from multiple lenders is the best way to save money on your mortgage. This feature will help you find the mortgage that is right for you and is free to use, like everything on FREEandCLEAR.

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About the author

Michael Jensen, Mortgage and Finance Guru

Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael

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