20% Down? Ain’t That a Shame…

(This post was originally published on 11/2/17.)

Last week, with the passing of Fats Domino, we lost a rock ‘n’ roll legend and pioneer.

But nearly every week we lose transactions simply because of the unquestioned and untested myth that every buyer needs to bring in at least a 20% down payment, especially here in California where many of our home prices require loans that exceed the conventional and FHA loan limits. In addition to simply not recognizing that many great programs exist in order to accommodate a 10% down payment on a jumbo mortgage, here are the two other challenges we commonly see:

Getting Approved

Putting down 10% means borrowing 90% and that translates to a larger housing payment and a higher debt-to-income (DTI) ratio. I’d say that my team and I are the best in the west when it comes to understanding the programs available and the parameters our clients must meet in order to become approved borrowers. Sometimes you not only have to think outside of the ordinary credit box, you have to approach future success as if no box exists. While many of our competitors will try to shoehorn a buyer into a 20% down mortgage by having them ask family for gift funds or by suggesting they raid their 401K accounts, we’re going to focus first on what a buyer can do on her own and we’re going to determine the outside limits of her qualifying power. From there, this buyer can determine a responsible budget and strategy, but do so with more cards on the table.

Getting Into Contract

Once we have a loan pre-approved (or underwritten in advance), our next challenge will be to have our buyer’s offer seriously considered alongside the others that may come in on any desirable property. Here, we may encounter a listing agent who wants to take no chances or who is just not aware that 10% down strategies are again very viable for qualified buyers. Instead of defending a position of “Well, your buyer only has 10% down…,” we look at it as, “Our buyer is strong enough to qualify for this type of program!” And then, we back it up with a lot of experience. Winning any offer is a blend of luck and skill, but when we support one of our 10% down client offers, we do not do so from a position of weakness.


It’s a quote often attributed to Mark Twain that goes, “It ain’t what you don’t know that gets you in trouble. It’s what you know for sure that just ain’t so.”  And while we’re on the topic of “ain’ts,” it is a shame that more buyers are not aware they can win with 10% down. We do it all the time and we’re here to help them find the thrill of home ownership with less than a 20% down payment.

I’m walkin’, 


Robert J. Spinosa

Vice President of Mortgage Lending

Guaranteed Rate

NMLS: 22343

Cell/Text: 415-367-5959 Fax: 415-366-1590


Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960

Berkeley Office: 1400 Shattuck Ave., Suite 1, Berkeley, CA 94709

*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.

Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood Chicago, IL 60613 – (866) 934-7283

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