The money you’ll need for a down payment on a $100,000 home could be $0 or $20,000 – or more. The answer is specific to you, and it comes down to two factors: One, the type of home mortgage loan you opt for and other personal preferences, and two, your qualifications as a borrower.
If you’re ready to buy a $100K house, you’ll want to know where you fit in the equation when it comes to your down payment. That’s where we come in. This is a comprehensive guide with real examples and numbers to help you understand how much down payment you’ll need for a home of your own. We’ll cover how much income you should have, how different factors affect your down payment, and the process of getting a mortgage.
Key Points
• The down payment for a $100,000 home for first-time buyers ranges from $0 to $20,000, depending on loan type and qualifications.
• FHA loans allow a down payment as low as 3.5% for some buyers; conventional loans 3%.
• VA and USDA loans can have 0% down payments.
• Preparing for a mortgage involves getting finances in order, saving for a down payment, and exploring loan types.
• Income levels do not directly affect down payment requirements but influence mortgage affordability and monthly payments.
How Much Income Do I Need to Afford a $100K Home?
If you don’t have any debt (no auto loan, student loan, or credit-card debt, for example), you need a minimum of $2,650 per month, or $31,800 per year to afford a $100K home loan. That’s assuming a 7.00% interest rate and no down payment. If you have $500 in debt payments every month, the income requirement increases to $4,000 per month, or $48,000 per year.
Keep in mind that qualifying for a mortgage depends on more than your income. There are several factors your lender will consider to qualify you for a mortgage. It’s always best to find out exactly what a lender requires, but in general, these tend to be:
Credit score: For any lender to approve your mortgage, you’ll need a credit score high enough for the loan you want. If you’re looking at an FHA loan, backed by the Federal Housing Administration, and have a 10% down payment, you could qualify with a credit score as low as 500. Other government-backed loans from the USDA and VA have no minimum credit score requirement, while a conventional mortgage often requires a credit score of 620 or above.
Income: You need to make enough income to cover your mortgage and your monthly obligations.
Debt: Your monthly debt obligations are factored into the equation. Any monthly debt you have decreases the monthly mortgage payment you qualify for. Lenders also look for your debt-to-income (DTI) ratio – all of your debt added together divided by your gross income – to be no more than 36% of your income.
Type of loan: The type of mortgage loan affects how much income you’ll need to afford a $100,000 mortgage. This is because different types of loans have different interest rates and down payment requirements.
Interest rate: The interest rate environment affects home affordability and changes how much income you need to afford a $100,000 mortgage. Remember that if rates drop after you purchase, you can always consider a mortgage refinance.
Property details: Property details matter – such as location and age – because it will affect your affordability. The age and build details of the house affect homeowners insurance and property taxes. This changes how much income you need.
These are examples of how much income you need to afford a $100,000 home. There are various loan terms, interest rates, down payments, and debt loads.
| Monthly debt | Mortgage term | Interest rate | Down payment | Income needed per month |
|---|---|---|---|---|
| $0 | 30 years | 7.00% | 0% | $2,650 |
| $400 | 30 years | 7.00% | 0% | $3,750 |
| $400 | 30 years | 7.00% | 5% | $3,500 |
| $400 | 30 years | 5.00% | 5% | $3,200 |
| $0 | 30 years | 5.00% | 0% | $2,300 |
| $0 | 15 years | 6.50% | 3% | $3,200 |
How Much Is the Down Payment for a $100K House?
The down payment needed for a $100,000 house varies by loan type. In some cases, such as with a VA loan (backed by the U.S. Department of Veterans Affairs) or a United States Department of Agriculture (USDA) loan, you may be able to avoid a down payment altogether. In most cases, if you’re a first-time homebuyer or haven’t owned a primary residence in the last three years, you’ll need between 3% and 3.5% ($3,000 to $3,500) for the down payment on a $100,000 home.
Here’s a breakdown of the minimum down payment by loan type for a first-time buyer. (A $100,000 home is within the conforming loan limits and is not considered a jumbo loan.) Keep in mind, putting down less than 20% requires you to purchase some type of mortgage insurance, the costs of which will be included in your loan.
| Loan type | Minimum down payment | Down payment for a $100K house |
|---|---|---|
| FHA | 3.5% | $3,500 |
| Conventional | 3% | $3,000 |
| VA | 0% | $0 |
| USDA | 0% | $0 |
What Are the Down Payment Options for a Home Worth $100K?
First of all, congratulations if you have found a home valued at $100,000. Given that the average U.S. home price is much higher than that, you must be shopping in one of the best affordable places in the U.S.!
Purchasing a home for $100,000 will help keep your overall cost of living in line. Your down payment options on a $100K mortgage depend on your loan type. As mentioned above, there are some options where you don’t have to put any money down, and others where you need to put down at least 3%. Here are some common down payment options for a home worth $100K:
• 0% = $0
• 3% = $3,000
• 3.5% = $3,500
• 5% = $5,000
• 20% = $20,000
If you’re worried about coming up with a down payment, there are down payment assistance programs that might be able to help. You need to meet the program requirements, which are often geared toward first-time homebuyers located in a specific area who need financial assistance. The property itself also must meet certain conditions outlined by the program.
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What Does the Monthly Mortgage Payment Look Like for a $100K Home?
The monthly mortgage payment for a $100,000 home works out to roughly $665 for principal and interest. When you add in taxes, homeowners insurance, and mortgage insurance, you’ll be closer to $925 per month. These numbers assume a 7.00% interest rate on a 30-year loan with property taxes of $1,250 and a homeowners insurance premium of $750. These numbers will be different, of course, depending on your area, property, and personal qualification factors.
The following is a sample table of the different monthly mortgage payments you could see on a $100K mortgage with varying down payment amounts, interest rates, and loan terms.
| Loan term | Interest rate | Down Payment | Principal and interest | Taxes and insurance | Private mortgage insurance (PMI) | Mortgage payment |
|---|---|---|---|---|---|---|
| Examples of mortgage payments with different down payments | ||||||
| 30 years | 7.00% | 0% | $665 | $167 | $92 | $924 |
| 30 years | 7.00% | 3% | $645 | $167 | $89 | $901 |
| 30 years | 7.00% | 20% | $532 | $167 | $0 | $699 |
| Examples of mortgage payments with lower interest rates | ||||||
| 30 years | 5.00% | 3% | $521 | $167 | $89 | $776 |
| 30 years | 4.00% | 3% | $463 | $167 | $89 | $719 |
| Examples of mortgage payments with shorter loan terms, slightly lower interest rates | ||||||
| 15 years | 6.50% | 3% | $845 | $167 | $89 | $1,101 |
| 20 years | 6.50% | 3% | $723 | $167 | $89 | $979 |
As you can see, there’s a wide variance in monthly payments for a $100,000 mortgage. Shorter terms, higher interest rates, and lower down payments result in higher monthly payments — although with a shorter term, borrowers will pay less interest over the life of the loan. Longer loan terms, lower interest rates, and higher down payments result in lower monthly payments.
What to Do Before You Apply for a Mortgage on a $100K Home
If you’re not quite ready to apply for a mortgage on a property valued at $100,000, there are some steps you can take in the meantime to help you qualify as a first-time homebuyer or even as a repeat homebuyer.
• Talk to a lender. Even if you’re not ready to apply for a $100,000 mortgage, it’s better to get your questions answered sooner rather than later. A good lender can explain your options and help get you on the path to mortgage qualification.
• Set your goals. Write down what you want and how you’re going to get it. Put a plan in place for qualifying for a mortgage. You might consider paying down debt or saving for a down payment.
• Check your credit. See where you’re at and what you need to do to improve your credit score. A good credit score will get you the best interest rates and save you money for years.
• Shop around for a loan Look at different lenders with different loan options. Get loan estimates and be sure you’re comparing apples to apples. Look at the loan’s annual percentage rate (APR), which includes fees.
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Should I Get Preapproved Before Applying for a Mortgage?
Getting preapproved for a mortgage is a great strategy. Mortgage preapproval is a strong indication that you’ll be approved for the loan. It can help you make decisions about what loan will be best for you and puts you in a better position to negotiate with sellers. Going through the mortgage preapproval process helps your true financial picture become clear.
How to Get a $100K Mortgage
Getting a mortgage on a $100,000 home is a simple process if you’re qualified, but you might not be familiar with it if you’re buying your first home. According to the Consumer Financial Protection Bureau, the process looks like this:
Prepare to shop for a loan
This step involves getting your finances in order. You’ll assess your spending, figure out how much you want to spend, how much you can save for a down payment, and pull all your documents together (tax return, bank statement, etc.)
Explore loan choices
You’ll learn about the different types of loans, loan costs, and shop around for a lender.
Choose a loan offer
Request loan estimates and preapprovals from several different lenders, look closely for loan details that matter most to you, and choose a lender you can trust and that can offer you competitive pricing.
Close on the new loan
Once you’ve selected a loan officer, you’ll send over the contract to them to get the mortgage process started. You’ll submit required documents, schedule a home inspection and other due diligence items, obtain title and homeowners insurance, and review documents before closing.
The Takeaway
The down payment for a mortgage on a home valued at $100,000 ranges from $0 to $20,000, though you could put down even more. The factors that affect how much you need for a down payment depend on your loan type and personal preference and qualifications. If you go with a VA loan, for example, you might not need a down payment at all. If you have a credit score above 580 and you opt for an FHA loan, your down payment will be a minimum of 3.5%. And a qualified first-time homebuyer can get a conventional mortgage from some lenders with a downpayment as low as 3%.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
How much should I make to afford a $100,000 house?
How much you need to make to afford a $100,000 house starts at about $32,000 per year. This assumes you have no debt and can secure a 7.00% interest rate on your mortgage. Your debt and interest rate are some of the biggest factors determining how much you need to make to afford a $100,000 home.
What credit score is needed to buy a $100,000 house?
The credit score needed to buy a $100,000 house depends on the type of mortgage you get. The credit score requirements for an FHA loan is generally 580, unless you’re able to make a down payment of 10% or more, in which case, you can have a credit score as low as 500. For a conventional loan, it’s 620. For a USDA or VA loan, there’s no minimum credit score requirement for the program, though a lender may impose one.
How much is a $100K mortgage per month?
A $100,000 mortgage with a 7.00% interest rate and a 30-year term is roughly $924 per month. That amount includes $665 in principal and interest, $167 for taxes and insurance, and $92 for mortgage insurance.
Photo credit: iStock/Mariia Vitkovska
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*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
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¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
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