To apply for a home loan and pay the down payment, first save for a down payment of at least 3-20%, depending on the loan type. Explore down payment assistance programs like FHA loans (3.5% down) or VA loans (0% down for veterans). Get pre-approved by a lender to determine affordability and strengthen your offer. Gather documents such as pay stubs, tax returns, bank statements, and W-2 forms. Submit a loan application with a mortgage lender, who will underwrite the loan based on credit score, debt-to-income ratio, and property appraisal. Once approved, close the loan by paying the down payment, closing costs, and arranging mortgage insurance if required.

The down payment is critical as it reduces the loan amount, lowers interest costs, and determines loan eligibility. For example, a 20% down payment eliminates private mortgage insurance (PMI), saving hundreds annually. According to Fannie Mae (2023), 72% of first-time buyers use down payment assistance programs, with FHA loans accounting for 35% of purchase mortgages. A higher down payment also improves credit score resilience, as lenders view larger deposits as lower risk. Data from the Federal Reserve (2022) shows that buyers with 10-20% down payments secure lower mortgage rates by 0.5-1.5 percentage points compared to those with less. Pre-approval expedites the process, reducing home search time by 30% (National Association of Realtors, 2023). Without a competitive down payment, applicants face higher interest rates or loan denials, particularly in competitive markets where 20%+ down payments are standard.