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For many people, saving for a down payment is one of the many barriers to buying a home. Some loans require a down payment of 5% to 20% of the price of the home—which can be a big chunk of change.
But having a sizeable down payment does have benefits:
Before you know how much you need to save, think realistically about how much you’ll be spending on your home purchase. If you don’t have a price range in mind, get pre-approved or use our affordability calculator to determine a reasonable range. Once you’ve got your number, set your sights on saving 5% to 20% of that amount.
If you’re not looking to buy immediately, you can break your savings goal down into more manageable monthly amounts. If you need to save $10,000 and want to buy in about a year, you’ll need to save about $840 a month.
Finding extra money to put toward a down payment isn’t easy, but if you take a careful look at your budget, you will likely find things to cut out or cut back on. Here are some ways to get started:
Many people borrow from family and friends to help finance a down payment. But depending on how much you borrow, this may be a factor in which loans you qualify for. A PNC Mortgage loan officer can provide more details on other down payment options, such as gifts from family, loans from friends, or borrowing from a retirement fund to pay for a down payment without the usual penalties. If you’re considering any of these options, we recommend consulting with a financial advisor to discuss the pros and cons.
If saving 5% to 20% just isn’t realistic, don’t be discouraged. You may qualify for a no or low down payment mortgage options, such as Fannie Mae's 3% down payment program or government backed VA and FHA loans. Check out the different loans PNC has to offer. to review what’s available from PNC. Or contact one of our Loan Officers to see if you qualify for any specialized loans.
House hunting? Getting pre-approved by a mortgage lender can be a smart move, because you'll:
You can often get a commitment letter from your lender in as little as 48 hours, once your paperwork is complete.
A preliminary pre-approval is a great first step in your home buying journey. Some of the benefits include:
This means that you will:
The lender will also analyze your credit report (for you and any co-applicant) to determine if you qualify and what rate you may be offered. Having an average or better credit score will work in your favor. Learn more about your credit score.
Once your paperwork is complete, you can often get a commitment letter from your lender in as little as 48 hours.
Most pre-approval letters are good for 30 days. If you need more time, your lender will most likely pull a current credit report to make sure your financial situation hasn’t changed.
Reasons for being denied usually fall into two areas—credit and income— and the lender will let you know why you weren’t approved.
Before you re-apply and depending on your specific denial reasons you may want to:
Final loan approval and amount are subject to verification of loan data, property appraisal and underwriting conditions
PNC and PNC HomeHQ are registered service marks of The PNC Financial Services Group, Inc. ("PNC"). PNC is a registered service mark of The PNC Financial Services Group, Inc. (“PNC”). All loans are provided by PNC Bank, National Association, a subsidiary of PNC, and are subject to credit approval and property appraisal.
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