If you’ve heard you need 20% down to buy a home, that’s simply not true. It’s especially worth knowing if that belief is what’s holding you back from looking in Marble Falls. A bigger down payment can lower your monthly payment and get you out of mortgage insurance sooner, but it’s not a requirement for most buyers. What actually matters is how your credit, income, and loan type fit together. I’m Robbie English, Broker and REALTOR at Uncommon Highland Lakes Realty, and here’s how lenders actually evaluate that.
Down Payment: Not Always 20%
A larger down payment does lower your risk profile to a lender, but it’s far from the only path in. Conventional loans are available with as little as 3% down for qualified buyers, FHA loans with 3.5% down, and VA loans with 0% down for eligible veterans and service members. Which program fits depends on your credit, your income documentation, and sometimes whether this is your first home. Don’t assume you’re priced out before you’ve actually run the numbers.
Debt-to-Income Ratio: The Other Half of the Equation
Lenders want to see that your income comfortably covers your existing debts plus the new mortgage payment. Car loans, student loans, and credit card balances all factor into your debt-to-income ratio (DTI). A high DTI doesn’t automatically disqualify you, but it can mean a higher required down payment or a less favorable rate. Paying down even a few thousand dollars of revolving debt before applying can shift what you qualify for.
Job History: Consistency Over Flash
Two or more years in the same field or with the same employer is a strong signal to a lender, even if you’ve changed jobs within that field. Frequent gaps or changes raise questions because lenders are underwriting for continued, predictable income. If you’re self-employed, expect to provide two years of tax returns showing steady income. It’s not a dealbreaker, but it is something to plan for and gather ahead of time.
Credit Score: Your Financial Track Record
Higher scores open up more loan programs and better terms. A score in the 700s puts you in a strong position; mid-600s is still workable for most programs; scores in the low 600s can still qualify for certain loan types, typically with a rate or insurance tradeoff. If your score isn’t where you’d like it, there are concrete ways to improve it before you apply. It’s worth doing before you shop for homes, not after.
Pre-Approval Is Not the Same as Pre-Qualification
Pre-qualification is an estimate based on what you tell a lender. Pre-approval means a lender has actually verified your income, credit, assets, and liabilities and committed, in writing, to lend up to a specific amount pending appraisal. In a competitive Marble Falls listing, a pre-approval letter is what gets your offer taken seriously. A pre-qualification often isn’t enough on its own.
What a Lower Down Payment Usually Means for Your Monthly Payment
Putting down less than 20% on a conventional loan typically means paying private mortgage insurance (PMI) until you reach roughly 20% equity, and FHA loans carry their own mortgage insurance premium for some or all of the loan term depending on your down payment. That’s a real monthly cost worth factoring in alongside principal and interest. It doesn’t cancel out the benefit of buying sooner with less down, but it should be part of your budget conversation with a lender up front.
Let’s Look at Your Actual Numbers
Every buyer’s situation is different, and the right loan program depends on specifics a generic article can’t cover. Reach out to me, and I’ll connect you with a lender who can map out your realistic options. I won’t make assumptions about what you can or can’t afford until we’ve actually looked. Call or text 830-953-5571.
