Buyers: You Don’t Need to Put Down 20% to Buy a Home

I recently met with a buyer who’s been renting for years who told me they were sick and tired of paying someone else’s mortgage—they wanted to buy. When I asked what their timeline was, they said ASAP. However, when I asked if that meant two, three, or four months, they said more like six to nine months.

When I told him that six to nine months didn’t really qualify as “ASAP,” I asked if they were traveling soon or had other obligations to tend to. They said they didn’t—they just couldn’t afford to put down 20% for their down payment.

The myth that you must put down 20% to buy a house is, unfortunately, still circulating among buyers. In the past, a lot of buyers did put down 20% because it saved on PMI (private mortgage insurance). Nowadays, though, if everyone needed to put down 20% to buy a home, we’d all still be renting.

To clarify, you do need some money saved up to buy a home because of the down payment and closing costs involved, but you don’t have to put down 20%. There’s a loan program out there for everyone—it all depends on your budget, credit score, where you want to move, and the taxes included. Some of these programs require as little as 5%, 3.5%, 1%, or even 0% down.

If you’re interested in taking advantage of these programs, give me a call and I’ll put you in touch with a great lender. They’ll pair you with the right loan program and help you find a great home.

In the meantime, don’t hesitate to use the home search and home valuation links right here on my blog if you want to start the home buying process. If you have any other real estate questions or you’re thinking of selling a home, feel free to reach out to me as well. I’d love to help you.