Down Payment Myths Busted

Ask most people how much you need to buy a home, and they'll say "20%." That number has been passed down through generations — but for many first-time buyers, it's simply not accurate, and waiting to save 20% could cost you more than you think. Let's separate fact from fiction.

Myth #1: "You must have 20% down"

This is the most common misconception in home buying. While a 20% down payment does eliminate Private Mortgage Insurance (PMI), it is absolutely not a requirement. Here's what's actually available:

• FHA Loans: As low as 3.5% down with a credit score of 580+.
• Conventional 97: Just 3% down for eligible first-time buyers.
• USDA & VA Loans: Zero down payment for qualifying borrowers.
• Down Payment Assistance Programs: Grants and forgivable loans that cover your down payment entirely.

Myth #2: "I should wait until I have more saved"

This is one of the costliest mistakes first-time buyers make. Every month you wait, home prices and rents may continue to rise. Meanwhile, the equity you could be building is going into your landlord's pocket.

Let's say you're waiting to save an extra $20,000. If home prices increase 5% during that time on a $300,000 home, the price goes up $15,000 — essentially canceling out a portion of your savings. Getting in the market sooner, even with a smaller down payment, often makes more financial sense.

Myth #3: "PMI is a waste of money"

Private Mortgage Insurance gets a bad reputation, but think of it differently: PMI is what allows you to buy a home now instead of waiting years. Once you've built 20% equity in your home, PMI can typically be removed — and in many cases, the equity you gain while paying PMI far outweighs the cost.

PMI typically costs between 0.5–1.5% of your loan amount annually. On a $250,000 loan, that's roughly $100–$300 per month — a small price to pay for entering the housing market years earlier.

Myth #4: "Down payment assistance is only for low-income buyers"

Many buyers are surprised to learn they qualify for down payment assistance programs. These programs vary by state, county, and lender — and many have higher income limits than you might expect.

• First-generation homebuyer grants
• State Housing Finance Agency (HFA) programs
• Employer-sponsored homeownership programs
• Lender-specific first-time buyer grants

A knowledgeable loan officer can identify which programs you qualify for — you may be leaving thousands of dollars on the table without knowing it.

The bottom line on down payments

There's no one-size-fits-all answer to how much you should put down. The right amount depends on your financial goals, the loan program you choose, and how long you plan to stay in the home. What matters most is that you have a clear strategy — and someone in your corner to help you build it.

“Don't let down payment myths hold you back. I'll walk you through every option available and help you decide which makes the most sense for your situation.”