You can change the down payment amount before closing, but the lender has to approve the new figure, re-verify where the money is coming from, and reissue your Closing Disclosure. Handled early, the change is routine. Handled in the final week, it can push your closing date.
What the New Amount Has to Satisfy
The revised down payment still has to clear your loan program’s minimum. FHA loans require at least 3.5% of the purchase price.1U.S. Department of Housing and Urban Development (HUD). What Is the Minimum Down Payment Requirement for FHA Conventional conforming loans through Fannie Mae go as low as 3% down for first-time buyers using HomeReady or the standard 97% loan-to-value option.2Fannie Mae. 97% Loan to Value Options VA-backed purchase loans often require nothing down, as long as the sale price does not exceed the appraised value.3Veterans Affairs. Purchase Loan Jumbo loans above the 2026 conforming limit of $832,750 in most areas typically require at least 20% down.4Federal Housing Finance Agency. News Releases
Two thresholds matter whichever way you move. Dropping below 20% on a conventional loan adds private mortgage insurance to your monthly payment.5Consumer Financial Protection Bureau. What Is Private Mortgage Insurance Pushing your down payment up can lower the lender’s risk enough to earn a better rate or eliminate PMI entirely.
Documentation the Lender Will Need
Before the lender adjusts your loan terms, you have to prove where the money is coming from. Fannie Mae’s guidelines require bank statements covering the most recent 60-day period so the funds can be verified as seasoned.6Fannie Mae. Verification of Deposits and Assets The exact paperwork depends on the source:
- Bank accounts: updated statements for the last 60 days showing the full balance and transaction history.
- Gift funds: a signed gift letter from the family member providing the money, plus evidence of the transfer into your account.
- Investment accounts: statements showing the sale of stocks, bonds, or mutual funds, plus proof the proceeds were deposited into checking or savings.
- Retirement accounts: statements identifying your vested balance and the withdrawal terms.
Give your loan officer the exact dollar amount or percentage you want to land on. Moving from 10% to 15% on a $400,000 home means producing another $20,000, and the clearer that figure is at the start, the fewer rounds of revision the underwriter needs.
What Happens to Your Rate Lock
A rate lock is tied to specific loan terms, including the loan amount. Change what you’re putting down and the loan amount changes with it, which the lender can treat as a material change to your application. The Consumer Financial Protection Bureau lists a change in the down payment amount as one of the common reasons a locked rate might shift.7Consumer Financial Protection Bureau. What’s a Lock-In or a Rate Lock on a Mortgage
Ask your loan officer before you submit the change whether the new loan amount affects the lock. If rates have climbed since you locked, even a small adjustment can raise your monthly payment. If rates have fallen, a new lock might work in your favor, but nothing guarantees it.
Underwriting and the Revised Closing Disclosure
Once your updated documentation is in, the loan officer sends the file back through underwriting. The underwriter recalculates the loan amount, the loan-to-value ratio, and your debt-to-income ratio, and confirms the revised numbers still qualify under program guidelines and the lender’s internal limits.
When the file clears, the lender issues a revised Closing Disclosure showing the new loan amount, monthly payment, interest charges, and cash due at closing. It usually arrives through the lender’s portal or by email. Review it, confirm receipt, and do so quickly. The closing timeline does not advance until you do.
Will It Delay Closing?
Not every change triggers a new waiting period. Federal rules require a new three-business-day wait only when the annual percentage rate becomes inaccurate, the loan product itself changes, or a prepayment penalty is added.8Consumer Financial Protection Bureau. Regulation Z – 1026.19 Certain Mortgage and Variable-Rate Transactions For any other revision, a corrected Closing Disclosure just has to reach you at or before closing.9Consumer Financial Protection Bureau. TILA-RESPA Integrated Disclosure FAQs
The APR trigger is the one to watch. Under Regulation Z, a disclosed APR is considered inaccurate if it shifts by more than 1/8 of 1 percentage point (0.125%) from the actual APR.10Consumer Financial Protection Bureau. Regulation Z – 1026.22 Determination of Annual Percentage Rate A big swing in the down payment, like dropping from 20% to 10%, can push the APR past that threshold once PMI and a larger balance are factored in. Going from 20% to 18% probably won’t. When the three days do apply, Saturdays count as business days for this purpose but Sundays and federal holidays do not.9Consumer Financial Protection Bureau. TILA-RESPA Integrated Disclosure FAQs
When a Low Appraisal Forces the Change
Sometimes the appraisal makes the decision for you. If the home appraises below your agreed purchase price, the lender will only base the loan on the appraised value. The gap is yours to cover unless the seller agrees to drop the price.
Say you agreed to pay $400,000 and planned to put 10% down ($40,000) on a $360,000 loan, and the appraisal comes in at $380,000. The lender will only lend against $380,000. Keeping the deal at the original price means covering the $20,000 appraisal gap out of pocket on top of your original down payment, which pushes your cash contribution to $60,000. If that is not available, your options are renegotiating the price, reducing your down payment percentage relative to the appraised value (which may add PMI), or walking away if your contract has an appraisal contingency.
Effect on Your Purchase Contract
Changing the down payment is a lending decision, but it also touches your agreement with the seller. Most purchase contracts spell out the financing terms, including the loan type, loan amount, and down payment. Change those numbers and the seller or the seller’s agent may need to sign an amendment or addendum acknowledging the revised terms. Usually straightforward, but it does need coordination with your agent and the seller’s side.
If the change delays closing past the contract date, you may need to request an extension. Sellers are not required to grant one. In competitive markets, a delay can create friction or, in rare cases, give the seller grounds to cancel. Tell everyone involved early: lender, agent, title company, and the seller’s agent.
Where the Extra Money Comes From
If a family member gives you the funds, the gift can carry gift-tax implications for the giver. For 2026, the annual gift tax exclusion is $19,000 per recipient.11Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 A married couple can give $38,000 combined to one recipient without filing a gift tax return. Amounts above that require the giver to file IRS Form 709, though tax is typically not owed unless the giver has exceeded their lifetime exemption.
Pulling money from a retirement account is another route, and the rules differ sharply by account type. Withdrawals from a traditional IRA for a first-time home purchase are exempt from the 10% early distribution penalty on amounts up to $10,000, though you still owe regular income tax on the withdrawal.12Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions That exception does not apply to 401(k) plans. A pre-59½ withdrawal from a 401(k) to fund your down payment triggers both income tax and the 10% penalty.