Down Payment

You don't need 20% down to buy a home. Conventional loans start at 3% down, FHA at 3.5%, and VA and USDA loans can be 0% down for buyers who qualify. Many buyers also use down payment assistance programs. The more you put down, the lower your monthly payment. Putting down less than 20% usually means paying mortgage insurance (see below).

Mortgage Insurance (PMI / MIP)

If you put down less than 20%, most loans add mortgage insurance to your monthly payment. It protects the lender, not you, but it's what makes buying with a small down payment possible. Conventional loans charge PMI, usually about 0.3% to 1.5% of the loan amount per year depending on your credit score and down payment, and it can be removed once you reach 20% equity. FHA loans charge an upfront premium plus a monthly premium (around 0.55% of the loan per year for most buyers), which typically stays for the life of the loan unless you put 10% or more down or refinance later. USDA loans have a small annual fee, and VA loans have no monthly mortgage insurance. Ask us which option keeps your monthly payment lowest.

Rate Buydown

A rate buydown means paying money upfront to get a lower interest rate, which lowers your monthly payment. A permanent buydown (discount points) lowers your rate for the life of the loan. A temporary buydown (like a 2-1) lowers it for the first 1 to 2 years, then it goes to the full rate. The money usually comes from the seller or builder as a concession, so it doesn't have to come out of your pocket. That's why new construction builders often offer them as incentives.

Buydowns work with most major loan programs. What changes is how much the seller can contribute:
• Conventional: up to 3% of the price with less than 10% down, 6% with 10% to 25% down, and 9% with more than 25% down.
• FHA: up to 6% of the price.
• VA: up to 4% in concessions. Discount points paid by the seller generally don't count toward that 4%.
• USDA: up to 6% of the price.
• Chenoa Fund (FHA with down payment assistance): buydowns are allowed, but the starting rate is usually higher than a traditional FHA loan with 3.5% down, so the final rate typically won't get as low.
• ADFA: rate buydowns and discount points are not allowed.

Ask us to compare your options side by side and see which one gives you the lowest monthly payment.

Down Payment Assistance (DPA)

Down payment assistance can cover your down payment, and sometimes closing costs, so you can buy with little or no money of your own. It's a great tool, but it isn't free. Most programs come as a second loan, and that can lower how much house you qualify for.

• ADFA (Arkansas Development Finance Authority): $1,000 up to $15,000 for down payment and closing costs, paired with an ADFA first mortgage (FHA, VA, USDA, or Freddie Mac conventional). The assistance is a second loan paid back monthly over 10 years at the same rate as the ADFA first mortgage, with no prepayment penalty. Rate buydowns and discount points are not allowed on ADFA loans. That payment counts toward your debt-to-income ratio, which is capped at 45%. Minimum credit score is 640. ADFA's StartSmart program is for first-time buyers, veterans, or homes in targeted counties, with income and price limits. Move-Up has no first-time buyer requirement but has an income cap.
• Chenoa Fund: 3.5% or 5% of the price, paired with an FHA loan. Minimum credit score is 600, with no income limits and no first-time buyer requirement. The forgivable option is a 0% second loan with no monthly payment. The 3.5% version is forgiven after 36 on-time payments in a row on your first mortgage, and the 5% version after 120. If you sell or refinance before it's forgiven, you pay it back. The repayable option is a 10-year second loan at 2% above your first mortgage rate, with a monthly payment. Lenders often price the first mortgage higher on Chenoa loans than on a standard FHA loan.

Why it matters: a second loan payment, a higher rate, or a lower debt limit can cut your buying power by tens of thousands of dollars compared to bringing your own 3.5%. Sometimes a builder rate buydown with seller-paid closing costs gets you further, with no second loan. Use the calculator above to compare options, then ask us which path keeps your payment lowest.

Loan Term

Your loan program can affect your interest rate and monthly payments. Choose from 30-year fixed, 15-year fixed, and more in the calculator.

Loan Type

There are several types of mortgage loans, but the most commonly used are fixed-rate and adjustable-rate loans. Fixed-rate loans have the same interest rate for the entire duration of the loan. That means your monthly payment will be the same, even for long-term loans, such as 30-year fixed-rate mortgages. Two benefits to this loan type are stability, and being able to calculate your total interest up front. Adjustable-rate mortgages (ARMs) have interest rates that can change over time. Typically they start out at a lower interest rate than a fixed-rate loan, and hold that rate for a set number of years, before changing interest rates from year to year. For example, if you have a 5/1 ARM, you will have the same interest rate for the first 5 years, and then your interest rate will change from year to year. The main benefit of an adjustable-rate loan is starting off with a lower interest rate.

Interest Rate

This field is pre-filled with the current average mortgage rate. Your actual rate will vary based on factors like credit score and down payment.

Property Tax Rate

The mortgage payment calculator includes estimated property taxes based on the home's value. You can edit this in the advanced options.

Home Insurance

Home insurance or homeowners insurance is typically required by lenders, depending on the loan program. You can edit this number in the mortgage calculator advanced options.

HOA Fees

A homeowners association fee (HOA fee) is paid by owners in certain neighborhoods to cover shared costs like common areas, landscaping, and amenities. Many new construction communities in Northwest Arkansas have an HOA. Fees can be billed monthly, quarterly, or yearly, so enter the monthly equivalent in the calculator.