About

Purchasing real estate is a liquidity event, not just a debt obligation. The Down Payment Calculator is engineered to reveal the true upfront cost of homeownership, known as "Cash to Close." While most tools focus solely on the percentage down, this system integrates state-specific property tax averages, loan-type constraints (FHA, VA, Conventional), and prepaid escrow requirements to prevent capital shortfalls at the closing table.

This tool addresses the critical PMI (Private Mortgage Insurance) threshold. By visualizing the trade-off between upfront cash and monthly cash flow, investors and homebuyers can mathematically determine the optimal capital allocation. It supports complex scenarios, including VA Funding Fees and Upfront Mortgage Insurance Premiums (UFMIP), ensuring high-fidelity financial modeling.

Formulas

The calculator employs distinct logic paths for cash requirements versus monthly amortization. The Cash to Close formula aggregates all liquid capital required before the loan funds.

Total Cash Required (Liquid Capital):

{

DownPayment + ClosingCosts + Prepaids - EarnestMoney

Monthly Payment (P&I) Calculation:

Loan ⋅ r⋅(1 + r)ⁿ(1 + r)ⁿ − 1

FHA & VA Adjustments:

For FHA loans, the Base Loan Amount is increased by the Upfront MIP (1.75%). For VA loans, the Funding Fee is often financed into the loan, increasing the Principal P used in the formula above.

Reference Data

Loan Program	Min. Down Payment	Mortgage Insurance	Closing Cost Impact	Typical Use Case
Conventional	3% (5% standard)	PMI if LTV > 80%	Standard (2-5%)	Borrowers with credit score 620+. PMI is cancellable.
FHA Loan	3.5%	1.75% Upfront + Annual MIP	Higher (UFMIP added)	Credit scores 580+ or higher DTI ratios.
VA Loan	0%	None (Funding Fee applies)	Funding Fee (1.25% - 3.3%)	Veterans & Active Duty. No PMI required.
Jumbo Loan	10-20%	Varies (Lender specific)	Standard	Loan amounts exceeding county limits.
USDA	0%	Guarantee Fee	Guarantee Fee added	Rural property purchases.

Frequently Asked Questions

The Down Payment is simply the equity portion of the purchase price you pay upfront (e.g., 20%). "Cash to Close" is the actual check you write. It includes the Down Payment PLUS Closing Costs (title, appraisal, origination fees) and Prepaids (taxes, insurance put into escrow). Cash to Close is often 3-5% higher than just the down payment.

Conventional loans typically require 3-20%. FHA loans are fixed at a minimum of 3.5%. VA and USDA loans allow for 0% down. However, lower down payments often trigger Mortgage Insurance (PMI or MIP), increasing your monthly obligation.

Generally, no. Lenders require "sourced and seasoned" funds from your own savings. However, you can often use "Gift Funds" from a relative, or assistance programs, provided they are properly documented. You cannot take a personal loan for a down payment.

On a Conventional loan, you will pay Private Mortgage Insurance (PMI) until you reach 20% equity. On an FHA loan, you pay MIP regardless of equity (often for the life of the loan) unless you put down 10% or more, in which case it lasts 11 years.