Home Base
Home Base with Marc Emrich
Buying your first home in Colorado is one of the biggest decisions you'll ever make — and most people start with more questions than answers. Home Base is here to change that.
Each week, mortgage broker Marc Emrich of Pivot Lending Group sits down to answer the real questions first-time buyers are asking: How much do I need for a down payment? What does my credit score actually mean for my loan options? What is a forgivable loan — and how is it different from a grant? What happens at closing?
No jargon. No pressure. Just clear, honest answers from a Colorado mortgage professional who helps buyers navigate the path to homeownership every day.
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Home Base
Down Payment Myths Colorado First-Time Buyers Believe
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Welcome to Home Base, the podcast that helps first-time homebuyers understand the road to owning their own home. I am your host, Lauren, and every week I'm joined by Mark Emmerich, Senior Loan Originator at Pivot Lending Group. Let us get into it. Mark, welcome back. Always good to have you in the chair.
SPEAKER_00Thanks, Lauren. Glad to be here. It's a good day to be talking about something I think a lot of people need to hear.
SPEAKER_01Today we're digging into down payments, specifically the myths that trip up first-time buyers here in Colorado before they even get started. Because there is a lot of bad information floating around, and it's actually keeping people out of homes they could probably afford. Mark, let's just go right at it. How often do you hear buyers come in thinking they need 20% down?
SPEAKER_00Honestly, it comes up constantly. The 20% figure has been around so long that most people treat it like a law, like it's the only way to buy a home. But it's really a holdover from how conventional loans used to work. And today, there are several loan programs that require far less. FDHA loans allow as little as 3.5% down for buyers who qualify based on credit. Some conventional loan programs go as low as 3%. And for eligible veterans and active duty service members, Virginia loans may require no down payment at all.
SPEAKER_01Okay, so where does the 20% number even come from then? Why does it still matter?
SPEAKER_00It matters because of something called private mortgage insurance. PMI. When you put down less than 20% on a conventional loan, lenders require PMI as a monthly cost added to your payment. It's there to protect the lender, not you, in case you were to default on the loan. So the 20% threshold is real, but it doesn't mean you can't buy below it. It just means there's an additional cost to factor in when you do.
SPEAKER_01That's the part I don't think people realize. They hear 20% or nothing when really it's 20% or you pay PMI. Those are very different things.
SPEAKER_00Exactly right. And the other thing buyers need to know is that PMI is not permanent. Once you've built up enough equity, typically 20% of the original purchase price, you can request to have it removed. So it's a short to medium term cost for a lot of buyers, not something you're locked into forever. On FHA loans, the structure works a little differently, but the point is there are paths forward worth understanding.
SPEAKER_01You mentioned FHA mortgage insurance works differently. Can you explain that a little?
SPEAKER_00Sure. On FHA loans, the mortgage insurance premiums, that's the FHA version of mortgage insurance, have their own rules around how long they apply and how much they cost, and those rules depend on your loan term and how much you put down. It's one of those areas where the specifics really matter for your situation, which is why sitting down with a mortgage professional to run your actual numbers is so important. What looks like the cheaper option up front doesn't always stay that way over time.
SPEAKER_01That makes sense. Now, you mentioned Colorado specifically. Are there programs here that can actually help buyers with the down payment itself?
SPEAKER_00There are. Colorado has programs through state agencies and some local governments that are designed to help buyers who can't cover the full down payment out of pocket. These programs can provide funds toward your down payment, your closing costs, or sometimes both. Eligibility typically comes down to your income, the purchase price of the home, and your credit profile. So not everyone qualifies, but a lot of first-time buyers are surprised to find out they do.
SPEAKER_01What does the money actually look like? Is it a loan? Is it a gift? Do you have to pay it back?
SPEAKER_00It depends on the program. Some are structured as grants, meaning there's no repayment required as long as you meet the program's terms. Others come as second mortgages that may be forgiven over time. So the longer you stay in the home and hold up your end of the agreement, the less you owe, and eventually it may go away entirely. The repayment structure is something a mortgage professional will walk you through clearly before you commit to anything.
SPEAKER_01So the real answer to how much do I need to put down is actually, it depends?
SPEAKER_00It really does, and I know that can feel unsatisfying when you want a number. But what it depends on is specific and knowable. Your loan type, your credit profile, what programs you may qualify for, and what monthly payment you're comfortable with. A larger down payment can lower your payment and eliminate PMI, but it also means more of your savings tied up in the home. Neither approach is automatically right. The best move is to look at your actual numbers and understand what each option costs you over time.
SPEAKER_01Before we wrap up, what would you say to someone who's been sitting on the sidelines because they don't have 20% saved?
SPEAKER_00I'd say don't let a number that may not apply to you make your decision. There are real options: lower-down payment programs, assistance programs, loan types built specifically for buyers in your situation. The first step is just having a conversation with a licensed mortgage professional who can look at where you actually stand. You might be closer to buying than you think.
SPEAKER_01Mark, if someone's driving home right now and they take one thing away from this episode, what should it be?
SPEAKER_00The 20% rule is a myth for most buyers, and believing it may be the only thing standing between you and home ownership, find out what you actually need. Because the real number is probably a lot more manageable than the one in your head.
SPEAKER_01Mark, thank you. This is exactly the kind of conversation I think a lot of buyers need to have. We'll see everyone back here next week on Home Base. That's it for this week's Home Base. If you want to learn more about home buyer programs and resources, visit co first time buyergrants.com. You'll find everything in English and Spanish. We're back next week. Thanks for listening.