You Have to Save the Whole Down Payment Yourself
Myth #5 of 30
Some people think a "real" homebuyer saved every dollar of their down payment on their own. If anyone helped, it somehow doesn't count. That pressure keeps people saving year after year while prices keep climbing.
The truth is, lots of first-time buyers get help, and there's nothing wrong with that. The National Association of Realtors found that 22% of first-time buyers in 2025 got money from family or friends for their down payment, the cash you pay up front when you buy.
Can family give you money for a down payment?
Yes. Most home loans let family give you money for your down payment, and often for closing costs too. Closing costs are the fees you pay on the day you sign the final papers.
Your lender, the bank or mortgage company giving you the loan, will ask for a gift letter. That's a short signed note from the person giving you the money. It says the money is a gift and you don't have to pay it back. The lender will also want to see the money move from their bank account to yours.
Tip: talk to your lender before the money moves. A big deposit with no explanation can slow your loan down.
Can you use retirement savings?
Some people do. The same report found 26% of first-time buyers used money from retirement or investment accounts. But taking money out of a retirement account can come with taxes or penalties, or it might be set up as a loan you have to pay back. Talk to a tax professional before you do this.
Where else can down payment money come from?
- Down payment help programs. These give you money or a forgivable loan toward your down payment. See Myth #4.
- Seller concessions. That's when the seller agrees to pay some of your closing costs, so your savings can go toward the down payment instead. See Myth #3.
- Low down payment loans. Some loans let you put down 3%, 3.5% or even 0%, so you need less to start with. See Myth #1.
Put two or three of these together and the amount you need to save on your own can shrink a lot.
Is it okay to accept help?
Absolutely. Families have been helping each other into homes for generations. If someone wants to help and can afford it, that's a gift. Just make sure it's written down the right way and everyone agrees it's a gift, not a loan.
What's the first step?
Talk to your lender first, then your family. Find out exactly how the money needs to be handled so it counts.
Make it personal: get your free workbook
Reading about it is one thing. Knowing your own numbers is another. We made a free workbook for this topic, Where Your Down Payment Comes From, that walks you through each idea in this post using your own situation. Sign up once and you'll get every workbook in this series as it comes out, right to your inbox.
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