These days, it's common to hear that renting a three-bedroom house in San Diego costs around $3,800 a month. When comparing this to the monthly payment for purchasing the same house with a 30-year fixed mortgage, it becomes clear that the down payment amount significantly affects the difference in costs.

According to Zillow data, the median home value in San Diego County is $1,007,800 as of the end of May 2026. Based on this figure, the down payment scenarios are as follows: 3.5% requires $35,273, 5% requires $50,390, 10% requires $100,780, and 20% requires $201,560.

Starting with a down payment of 3.5% or 5% is attractive due to the lower initial cash burden. If your credit score is 580 or higher, you can qualify for an FHA loan with a 3.5% down payment, and conventional loans can start at 3% for first-time homebuyers or those with an income at or below 80% of the area median income. However, it's important to note that if you put down less than 20%, you'll incur PMI, or private mortgage insurance, which adds to your monthly costs.

By meeting the 20% down payment of $201,560, you can pay only principal and interest without PMI, resulting in lower monthly payments. However, you need to weigh the time it takes to save this amount in cash against the fluctuations in home prices during that period. Whether to rent for a few more years to save a larger sum or to enter the market now with a lower down payment ultimately depends on where you find the balance between these two variables.

Approval rates are just as important as the size of the down payment. The 30-year fixed rates vary by credit score range, with themortgagereports.com reporting rates of 6.59% for scores above 780, 6.66% for the 760s, 6.75% for the 740s, and 6.91% for the 700s. The overall average is around 6.6% according to Freddie Mac PMMS. A 40-point difference in score can lead to a difference in interest rates, which directly impacts both your monthly payment and approval likelihood.

DTI, or debt-to-income ratio, is another critical factor to manage. According to the Consumer Financial Protection Bureau, a backend DTI of 43% or lower is recommended, while a frontend DTI that considers only housing costs should ideally be below 28%. Reducing credit card or auto loan balances in advance and avoiding opening new loans or changing jobs just before closing are basic steps to maintain a good approval rate.

California also has a down payment assistance program called CalHFA MyHome Assistance Program. This program offers a second loan to first-time homebuyers to cover up to 3.5% of the purchase price for down payment or closing costs, with eligibility based on a credit score of 660 to 680 or higher, income limits, and completion of homebuyer education. Since this assistance is settled at the time of sale or refinancing, it does not count as debt in your DTI calculations, which is a significant advantage for approval rates.

Getting pre-approved in advance clarifies your budget when viewing actual listings and builds trust with sellers when making offers. It's advisable to prepare income documentation such as W2s or recent pay stubs reliably and to set aside additional funds for closing costs.

If you're a family newly arrived from Korea, you may find the approval threshold feels different due to a short credit history. In such cases, preparing more robust income documentation can be helpful. Families moving from other states should also note that property tax calculations may differ from those in their previous state.

During the approval process, recent bank statements are scrutinized closely. If a large sum is deposited suddenly, you may need to explain its source, and if you're receiving part of the down payment as a gift from family, it's wise to have documentation ready to disclose this fact. Areas like La Jolla and Del Mar, which are popular among Korean families, often have intense competition, making it difficult to have offers considered without a pre-approval letter.

After your offer is accepted, it's also important to pay attention to when to lock in your interest rate. By allowing ample time until closing to set the lock period, you can maintain your initially calculated monthly payment even if market rates fluctuate in the meantime.

This information is not investment or legal advice, and actual contract and loan terms may vary based on state, county, and individual credit status, so it's advisable to consult with a mortgage professional before proceeding with any agreements.