First-time buyer guide
How Much Down Payment Do You Really Need to Buy Your First Home in Indiana?
Think you need 20% down to buy your first home in Indiana? Most buyers don't. Here's what you actually need and what costs people forget.
Probably less than you think.
One of the biggest misconceptions first-time buyers have is believing they need a 20% down payment before they're allowed to buy a house.
Most don't.
Many first-time buyers in Indiana purchase homes with far less through conventional loans, FHA loans, and down payment assistance programs.
But here's the part most people miss:
The down payment is only one piece of the puzzle.
I actually worry less about how much someone puts down and more about whether they'll still feel financially comfortable after they close.
Because buying a house and emptying your savings account on the same day isn't a great plan.
The 20% myth refuses to die
I hear this all the time.
"I'll talk to you once I save $60,000."
Most buyers don't need that much.
The 20% number became popular because putting more money down can lower your monthly payment and eliminate private mortgage insurance (PMI) on many conventional loans.
But it isn't a requirement.
People have been buying homes with smaller down payments for years.
Waiting until you've saved 20% often delays homeownership longer than necessary.
So how much do people actually put down?
It depends on the loan program.
Here are a few common paths many first-time buyers explore.
Conventional loans
Some conventional loan programs allow qualified buyers to put down as little as 3%.
FHA loans
Qualified buyers may be able to purchase with 3.5% down.
Down payment assistance programs
Indiana offers programs that may help eligible buyers with upfront costs.
The exact amount, eligibility requirements, and availability can change, so always verify current details with your lender.
The important thing to understand is this:
There isn't one magic number.
The question I care about more
I actually think first-time buyers ask the wrong question.
Instead of asking:
"How much do I need for a down payment?"
I think they should ask:
"How much money should I have left after I buy?"
That's a much better question.
Because becoming a homeowner also means becoming responsible for things renters never have to think about.
Water heaters break.
HVAC systems eventually need repairs.
Life still happens.
I don't want buyers putting every dollar they have into getting the keys.
The four expenses people forget about
The down payment isn't the only upfront expense.
You may also need money for:
Closing costs
These can include lender fees, title fees, taxes, and other transaction costs.
Home inspections
This helps you understand the condition of the house before closing.
Earnest money
This is a deposit you provide after an offer is accepted.
Moving expenses and reserves
Don't forget the cost of actually moving and setting aside emergency savings afterward.
What I usually tell first-time buyers
I don't give people a target savings number without context.
Instead, we work backward.
We figure out:
- A monthly payment that feels comfortable
- How much cash they'd like to keep after closing
- Their timeline
- Whether assistance programs might help
- What neighborhoods fit their budget
Then the numbers start making sense.
That's why I always say:
Comfort over max approval.
The goal isn't getting into a house as fast as possible.
The goal is getting into a house without creating unnecessary financial stress afterward.
Here's what I would do before opening Zillow
If you're planning to buy within the next 12 months, I would focus on four things first:
- Build a dedicated savings account.
- Understand what monthly payment feels comfortable.
- Talk to a lender early.
- Learn what assistance programs may apply to you.
Then start looking at homes.
Not the other way around.
Showings are not a plan.
The thing I wish more renters knew
Most renters aren't stuck because of money.
They're stuck because they don't have a plan yet.
Buying your first home doesn't require perfection.
It requires clarity.
Once you understand your budget, your timeline, and your options, homeownership usually starts feeling much more realistic.
Your next step
Don't start by trying to save an arbitrary number.
Start with a plan.
Figure out your monthly comfort number, your timeline, and the amount of savings you want to keep after closing.
Then the down payment becomes one piece of the puzzle instead of the entire puzzle.
Take the readiness assessment or start with the Blueprint before you ever start touring homes.
Common questions
- Do I need 20% down to buy a house in Indiana?
- No. Many first-time buyers qualify for loan programs that require much smaller down payments.
- What's the minimum down payment for a first-time buyer?
- It depends on the loan type. Some conventional loans allow qualified buyers to put down as little as 3%, while FHA loans may require 3.5%.
- Are there down payment assistance programs in Indiana?
- Yes. Indiana offers programs that may help eligible buyers with upfront costs, but requirements can change. Always verify current eligibility with your lender.
- Is the down payment the only money I need to save?
- No. You'll also want to account for closing costs, inspections, earnest money, moving expenses, and emergency savings.
- What's the first step before buying?
- Start with a plan, not a listing search. Understand your monthly comfort number before you ever start touring homes. Talk to Ian DeFelice.
Ready when you are
Want to talk through your first home?
Take the 2-minute readiness assessment, then we'll grab coffee.