Do You Really Need a 20% Down Payment?

Do You Really Need a 20% Down Payment?

One of the most common questions we hear at NeighborWorks Umpqua from first-time home buyers is whether or not they have enough saved to buy a home. How much is enough? Sure, if you can put 20% down on the home of your dreams and cover all your closing cost, that’s great! But many people accidentally keep themselves from purchasing now because of misconceptions about the home buying process. You could buy a home with less than 20% down if you meet all the other qualifications that make you mortgage ready. Things like stable employment, a solid credit history, etc. You may be wondering if purchasing a home with little to no money down is a good financial move, we can say there are a few things to consider before leaning one way or the other.  

Do you qualify for special financing? 

There are several loan products that are available for pretty much for any financial scenario. For example, if you are low- to moderate-income household moving to or interested in living a rural area, you may qualify for a USDA loan, a low to no money down payment loan meant to help people in rural areas achieve homeownership. If you or your spouse are an active duty or honorably discharged service member, reserve, National Guard member with at least 6 years of service, your household may qualify for a VA loan. VA loans provide 100% financing.  

FHA loans can be another great option since these loans have a 3.5% minimum down payment and are more flexible on credit scores than Conventional loans. Conventional loans (loans owned by Fannie Mae or Freddie Mac) only require a 3% down payment.  

Can you be strategic? 

Let’s just say a potential homeowner inherited, is gifted, or simply saved a significant sum of money. They are going to definitely want to see if homeownership is a good fit but there is a great opportunity to make some smart money moves such as paying off high-interest credit cards, medical bills, or just start an emergency fund (fund 3-6 month of living expenses). Depending on your loan product, you may find that the difference between a 20% and a 10% payment are really not as large as you might have expected, but the potential monthly savings you may see by paying off high-interest bills could be significant!  

So, how can you choose? 

There is no right or wrong way to decide. When starting out we recommend 3 things: 

1) Talk to your family: Find out what your shared financial goals are for the future and present. 

2) Do your research: Consider setting up a Homeownership Development appointment with a HUD-approved housing counseling agency like NeighborWorks Umpqua. Another starting point could be checking out MGIC’s nifty “Buy vs. Wait “mortgage calculator so you can compare how much equity you would build by going with a smaller down payment vs. renting while you save.

MGIC Buy vs Wait Calculator  

3) Find a lender you trust: Here at NeighborWorks Umpqua, we believe in helping our customers explore all their options before deciding on the right amount of a down payment for their situation and their goals. We are truly dedicated to being with our clients through the entire process.  


Olympia Church is NeighborWorks Umpqua‘s Director of Lending and has been working to support responsible homeownership for 10 years. 

What to do With the Rest of Your Tax Refund

With tax season behind us we can now look forward summer and a few of us out there may be holding on to the last bit of our tax refunds. Maybe you put aside a little bit just in case a good opportunity (or a surprise expense) arises.  If you were a last minute filer you may just be getting your refund now.  But before you prepare to ‘make it rain’, what if you could turn that money into more money to achieve your personal and financial goals? You can do just that with help from NeighborWorks Umpqua’s (NWU) Dream$avers program or our full-service lending department. Our full-service lending can help you finance your dreams of home ownership, fund repairs to improve your home, and much more! Dream$avers can help you to save money over a 6 month – 3 year period and match your savings to a potential $12,000. You can put that money towards your home, education, employment opportunities, business, vehicle, and more. Then you could really ‘Treat yo self’.

Home Ownership

Buying a home is a huge milestone that can represent the next chapter in life and financial stability. However, making it to that point can be a challenge in more ways than one. For example saving up for a home can take a long time and require a bit of financial planning. NWU can facilitate with the process to help you save for a down payment (or help you qualify for a loan that doesn’t require one), build a customized mortgage assessment, all to help you purchase the perfect home for you. Our services include a class on the ABC’s of home buying to give you the knowledge to find the right home and research home mortgage and insurance options. If you are hoping to buy a home, make sure you reach out to our Lending Department. Our full-service lending team will help ensure you get all of your questions answered and connected with the right loan product to fit your home ownership dreams.


Build Equity

With home ownership comes necessary maintenance and repairs to keep the home in consistently good condition. A cared for home shows over the years and comes with reward. If a home is not well taken care of, you can decrease your equity. Routine maintenance may be boring but it can prevent expensive damage and return as an investment if you choose to sell it one day. Investing your money in your home to get the highest return on investment can go a long way. Small changes such as updating the kitchen and bathroom or improving the landscape can increase your property value. NWU can provide funding for rehabilitation and home repair services to improve your housing conditions and get on track to build your home equity. Our full-service lending department can help identify other funding sources, if you need to start on repairs quickly.


Invest in yourself

Getting a secondary education is one of the most important things you can do for yourself or your child. Whether it’s trade school, community college or a four-year institution, education will help further your career and accomplish your dreams. We understand school is a large investment but it is well worth it in the long run. Instead of paying student loans, NWU can help pay for your education leaving you with a diploma and debt free .We are able to do this with the help of the Ford Family Foundation that provides individual development accounts for those 12+ years old and enrolled in an Oregon school or GED program.



Job training can help those who want to have more responsibility or get a promotion. This can lead to a number of benefits such as higher pay, medical/dental benefits, and more independence. If you find yourself wanting to move on from a current position to a better job or employment in general, NWU can help find opportunities for your area of expertise. Finding the job is only half the battle, landing the job is another story. NWU will help coach you throughout the process with your resume and interviewing skills to make it happen.


Be Your own Boss

Starting your own business can be a scary and stressful process. It requires self-motivation, sacrifices and patience as your business grows. After the big idea and business plan, the real world asks for money to make it happen. Don’t let money come in between you and your future business. With a little saving, creativity and strategic planning you can make your dream come true with the help of NWU.


Transportational Independence

While there are many benefits to public transportation and car-pooling, owning a car gives you the freedom to go where you want, when you want. Most importantly it gives you more job and housing opportunities of locations otherwise inaccessible by public transportation. Those opportunities open many more doors to further financial income, better jobs and an overall increase in quality of life.


Our full-service lending and Dream$avers services are meant to help reach your goals to improve yours and your family’s life. Our experts will help you identify the best way to go to improve your financial outlook. Interested to learn more? Reach out to a NeighborWorks Umpqua representative at 541-673-4909 or visit


Closed for Company Event!

NeighborWorks Umpqua will be closed at 3 pm for a company event. See you on Monday!.