Yes, You Can Buy a House Without 20% Down3 min read

How much of a down payment do you really need to buy a home? Saving up a down payment is one of the biggest obstacles for most people when buying a home. You may have heard the old rule that you need to save 20% down to buy a home.

44% of Americans believe you need a down payment of 20% or more to buy a home. But that’s not actually true. You can buy a home for less—sometimes, a lot less. In fact, the average first-time buyer puts just 7% down, while the average buyer puts 13% down.

What is a Down Payment?

If you’re not going to buy your home with cash, you’ll need a mortgage. While some loans will actually allow you to buy a home with a 0% down payment, most loans require you to put at least some money down.

If you purchase a $200,000 home and put $20,000 down, you have a 10% down payment. 20% down would be $40,000, which is quite a chunk of change to save up. Good thing it doesn’t have to be that much!

A Down Payment Impacts Your Monthly Payment

How much money you put down impacts your monthly payment. So if you want a lower monthly payment, put more money down.

Not only are you borrowing less money from the lender, but putting more money down means that you will likely have access to better interest rates. Better interest rates also lower your monthly payment.

Lower Down Payment Options

There are several well-known low down payment loan options. There are sometimes other low down payment loan programs, as well, depending on what’s available when you’re looking for a home.

VA Loan


FHA Loan

Conventional 3% Down Programs

Private Mortgage Insurance

If you don’t put at least 20% down on a home, you’ll most likely pay private mortgage insurance (or PMI), though this isn’t always the case. (VA and USDA loans do not have PMI, for instance.)

PMI protects the lender in case you default on the loan, and the premium is usually added to your monthly payment.

However, paying PMI isn’t necessarily a bad thing. Trying to avoid it can actually cost you in the long run if you put off purchasing a home while you’re trying to save 20% down.

Interested In Obtaining Mortgage Pre-Approval?

  Here at GTG Financial, we encourage each of our clients to  to have an initial mortgage planning discussion surrounding your current situation, goals/budget, and timeline.  There are so many additional factors that go into qualifying for a home loan today, it’s important that you are working with a professional that understands the ins and outs of the process and current market trends.

To get started,  please click Apply Now.

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