One of the biggest reasons people delay buying a home is because they think they need to save 20% down plus closing costs.
The reality? Most buyers don't.
In fact, many loan programs require much less:
🏡 Conventional: As little as 3% down for qualified buyers
🏡 FHA: 3.5% down
🏡 VA: 0% down for eligible Veterans and active-duty military
🏡 USDA: 0% down in eligible rural areas
That's great news—but let's talk about the other expense buyers often forget...
💵 What About Closing Costs?
Closing costs are separate from your down payment and typically include things like:
Loan origination fees
Title and escrow fees
Appraisal
Lender fees
Recording fees
Prepaid property taxes
Homeowners insurance
Initial escrow account funding
These costs generally range from 2%–5% of the purchase price.
The good news? You may not have to pay all of them yourself.
🤝 Seller Concessions Can Be a Game Changer
A seller concession is when the seller agrees to pay a portion of your closing costs as part of the purchase contract.
That means instead of bringing all of your down payment and closing costs to the closing table, the seller may be able to cover some—or even most—of those closing costs.
For many buyers, this can mean keeping thousands of dollars in their savings account instead of spending it all at closing.
With today's market becoming more balanced, seller concessions are making a comeback and are often part of the negotiation.
📊 How Much Can a Seller Contribute?
The maximum seller contribution depends on the loan program.
Conventional Loans
The maximum seller concession is based on your down payment:
Less than 10% down: Up to 3%
10%–24.99% down: Up to 6%
25% or more down: Up to 9%
Investment properties: Up to 2%
FHA Loans
Up to 6% of the purchase price.
VA Loans
Sellers can pay all of the buyer's normal closing costs, plus up to 4% of the purchase price toward additional allowable concessions such as prepaid expenses, debt payoff, funding fee, or temporary rate buydowns.
USDA Loans
Up to 6% of the purchase price.
Every transaction is different, and concessions must fit within program guidelines and the negotiated contract, but they're one of the best tools available to help buyers reduce their upfront cash investment.
💰 While You're Saving... Make Your Money Work for You
If you're planning to buy in the next year or two, don't let your savings sit in an account earning next to nothing.
Consider:
🏦 High-Yield Savings Account
Easy access to your funds
Higher interest than many traditional savings accounts
Great for buyers shopping within the next 6–12 months
📈 Certificate of Deposit (CD)
A CD can be a great option if you know approximately when you'll buy.
Benefits include:
Guaranteed fixed interest rate
FDIC or NCUA insured (within applicable limits)
No stock market risk
Often earns more than a standard savings account
Just remember: CDs have a set maturity date, and withdrawing funds early usually results in an interest penalty. Choose a term that matches your expected home-buying timeline.
💸 Automate Your Savings
Even $100 or $200 from each paycheck adds up surprisingly fast—and automating it makes saving effortless.
🐼The Bottom Line
Too many people spend years trying to save for a home because they think they need far more cash than they actually do.
Between:
Low down payment loan options
Down payment assistance programs
Seller concessions
Smart savings strategies like CDs and high-yield savings accounts
...homeownership may be much closer than you realize.
The first step isn't guessing how much you need.
It's creating a personalized plan.
Whether you're six months away or two years away, I can help you determine how much you'll actually need, explore programs that fit your situation, and build a savings strategy that gets you there faster.
📞 Let's put together your homebuying game plan. You might be closer than you think. Fill out the info below and we can collaborate on next steps to get you home!
