Your down payment is the portion of the home's price you pay upfront. It goes directly toward the purchase price and reduces your loan amount.
Closing costs are separate fees needed to finalize your loan and transfer ownership — lender fees, title work, appraisal, recording fees, and prepaid taxes and insurance.
Down Payment — Your Upfront Investment
The amount you pay out of pocket toward the purchase price on closing day.
A percentage of the purchase price you pay at closing — typically anywhere from 3% to 20%+ depending on your loan type.
Goes straight toward the price of the home and reduces your loan amount — lowering your monthly payment.
If you put less than 20% down on most loans, you may pay mortgage insurance (PMI/MIP) as part of your monthly payment.
On a $400,000 home, a 3.5% down payment is $14,000. The remaining $386,000 becomes your loan amount. At 5% down, you'd bring $20,000 and finance $380,000.
| Loan Type | Min. Down Payment | Min. Credit Score | Best For |
|---|---|---|---|
| Conventional | 3% | 620+ | Good credit, standard purchase |
| FHA | 3.5% | 580+ (10% if 500–579) | First-time buyers, lower credit |
| VA | 0% | No minimum (620 preferred) | Veterans & active military |
| USDA | 0% | 640+ preferred | Rural areas, income limits apply |
| Jumbo | 10%–20% | 700+ | High-value homes above conforming limits |
Closing Costs — Fees to Finalize the Purchase
Separate from your down payment — paid to your lender, title company, and government on closing day.
- Loan Origination Fee0.5%–1% of loan
- Discount PointsOptional — 1 pt = 1% of loan
- Underwriting Fee$500–$900
- Credit Report Fee$25–$75
- Title Search$150–$400
- Title Insurance (lender)$500–$1,500
- Title Insurance (owner)$300–$1,000
- Escrow / Settlement Fee$500–$1,200
- Recording Fee$10–$30 per doc
- Transfer TaxMinimal in AZ
- HOA Transfer FeeVaries by community
- Homeowners Insurance (1 yr)$800–$2,500+
- Property Tax Reserve2–6 months
- Prepaid InterestDays until 1st payment
- Appraisal$500–$900
What Does "Cash to Close" Mean?
The total you actually bring to the closing table — your lender will calculate the exact figure.
Help with Down Payment & Closing Costs (Arizona)
Arizona has programs that can significantly reduce — or eliminate — what you bring to closing.
Arizona's flagship statewide program provides down payment assistance of up to 5% of the loan amount — usable toward your down payment, closing costs, or both. Structured as a 3-year forgivable second mortgage.
- Up to 5% of loan amount in assistance
- Minimum credit score: 640
- Works with FHA, VA, USDA & Conventional
- Must use an AzIDA-approved lender
Maricopa County's program offers up to 6% assistance — the highest available in the state. Qualifying teachers, first responders, veterans, and income-qualified buyers can receive an extra 1% bonus.
- Up to 6% of loan amount in assistance
- Extra +1% for teachers, first responders, veterans
- Income limit: $153,440/yr
- No purchase price limit
Ask your lender and For The People Real Estate Brokerage LLC if you qualify for any Arizona assistance programs so we can structure your loan and contract to use them.
Before You Write an Offer
Get these answered before you fall in love with a home — so you're ready to move fast.
Talk with your lender about how much you'll need for down payment, closing costs, and total cash to close for your target price range.
Decide how much of your savings you're comfortable using vs. keeping as an emergency cushion after closing.
Ask about seller credits, rate-par vs. discount points, or down payment assistance programs that can reduce your cash to close.
A pre-approval letter confirms your budget before you make an offer — and lets your agent negotiate seller credits into the contract.
Confirm with your lender which Arizona assistance programs you qualify for — HOME+Plus, Home in Five, or credit union grants — before going under contract.
Large deposits or transfers in the weeks before closing can raise questions during underwriting. Talk to your lender before moving funds.