What They Don’t Tell You About Buying a Home

The down payment truth

Here’s the thing nobody puts in the ads: the 20% down payment is a myth for most buyers. It’s a fine goal if you have it — but it is not the price of admission. The real minimum depends on the loan:

• Conventional: as low as 3% down for qualified buyers.
• FHA: 3.5% down, with more forgiving credit standards.
• VA: 0% down for eligible veterans, active-duty military, and qualifying surviving spouses.
• USDA: 0% down in eligible areas — which, locally, includes parts of Pasco and Hernando that look like ordinary suburbs, not farmland. Income limits apply and the property address decides.

The honest tradeoff: less money down means a bigger loan, a higher monthly payment, and — on most loans — mortgage insurance added on top. That’s not a reason to wait by default. It’s a number to compare: sometimes getting in with 3–5% down and dropping the insurance later beats renting for three more years while you chase 20%.

Mortgage insurance, decoded

“Don’t let a myth about 20% keep you renting. Let a lender run your real numbers first.” — Chad

Down payments and program rules above are general program information, not a quote — a licensed lender confirms what’s available to you, today.

What a lender actually looks at

A pre-approval isn’t a vibe check. Underwriters run four checks, and knowing them in advance is the difference between a smooth file and a stressful one.

1. Credit — the score and the story

Lenders look at your score, yes — but also at the history behind it. Recent late payments, collections, and maxed-out cards matter, sometimes more than the number itself. A score that’s climbing with clean recent history reads very differently from the same score on the way down.

2. Job and income history

Lenders generally want to see about two years of work and income history. Here’s the part people get wrong: changing jobs in the same field is usually fine — a move up, or even sideways with similar pay, is easy to document. A career switch — new industry, new pay structure, commission or self-employment — needs explaining and more documentation, and brand-new self-employment income often can’t be counted until there’s a track record of it on tax returns. Thinking about a job change? Have the lender conversation before, not after.

3. Debt-to-income ratio — in plain English

Your DTI is simply this: all your monthly debt payments (car, cards, student loans, the future house payment) divided by your gross monthly income. Lenders have ceilings for it. This is why a new car payment before closing is so dangerous — it raises your DTI and can push you over the line you were approved under. More on that in the Do-Not-Do List below.

4. Documented funds — money with a paper trail

Your down payment money has to be documented: bank statements showing it sitting in your account (“seasoned” — lenders like to see it there for a couple of statement cycles). Gift money from family is allowed on most loans, but it needs a paper trail — a gift letter and proof of where it came from. A mattress full of cash, or a big unexplained deposit, is a problem even if the money is 100% legit.

None of this is about being perfect. It’s about no surprises — for the lender, or for you.

The cash nobody budgets for

The down payment is only part of the check you write. Here’s the rest of the cash-to-close that catches buyers off guard:

• Closing costs: lender fees, title work, recording, and more — typically about 2–5% of the purchase price as a typical range. On a $400K home, that’s roughly $8,000–$20,000 on top of your down payment.
• Prepaid escrows: at closing you pre-fund an escrow account — typically several months of property taxes and homeowners insurance collected upfront. It’s your money, held for your future bills, but it’s cash out of pocket on day one.
• Florida’s loan taxes: the state charges a documentary stamp tax on the mortgage note — $0.35 per $100 of the loan — plus a state intangible tax of 0.2% on the loan amount. Out-of-state buyers have never heard of either. Floridians pay both, every financed purchase.
• Title insurance: a one-time policy protecting against title problems. In much of Florida custom puts this on the seller’s side of the ledger, but who pays is set by the contract and local practice — confirm it in your offer, don’t assume.
• Appraisal, inspection, survey: each a few hundred dollars, each worth it. The inspection is the one never to skip — it’s your only professional look inside the walls before the money is committed.

And one more, for the month after closing: if the seller owned the home for years with a homestead exemption, their property tax bill is not the bill you’ll pay — taxes reset toward your purchase price. Budget on the reset number, then file your own homestead exemption by March 1 to start your own cap.

“Cash-to-close is the number that matters — not just the down payment. Know it before you fall for a house.” — Chad

The Do-Not-Do List

Once you’re pre-approved — and double once you’re under contract — your financial life goes under a microscope. A pre-approval is not the finish line. Underwriting re-verifies everything before closing, and ordinary, innocent moves can unravel it:

• ✕Do NOT buy a car, furniture, or appliances on credit. The classic: a new living-room set for the new house, bought three weeks before closing. New debt changes your ratios — and can end the loan.
• ✕Do NOT open new credit cards — or close old ones. New inquiries and new accounts move your score; closing old cards shortens your credit history and raises your utilization. Both directions are bad. Freeze the deck as it is.
• ✕Do NOT quit or change jobs without telling your lender first. Even a better job. Employment is re-verified right before closing, and a surprise change can pause or kill the file.
• ✕Do NOT make large cash deposits you can’t document. Every big deposit needs a paper trail. Undocumented money may not count — even if it’s genuinely yours.
• ✕Do NOT co-sign anything. A co-signed loan is your debt in the lender’s math, even if someone else makes every payment.
• ✕Do NOT miss any payment on anything. One 30-day late payment during the process can drop your score below the program minimum at the worst possible moment.

The rule underneath all six: if it touches your money, your credit, or your job, ask your lender before you do it. A two-minute call protects a six-figure loan.

I’ve never seen a closing die from a buyer asking too many questions. I’ve seen them wobble from ones nobody asked.

Your prep plan

Your checklist downloads as a simple text file — your answers, the Do-Not-Do List, and your prep plan, to save or print.