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💰 Do You Really Need 20% Down to Buy a Home? (Spoiler: Nope!)

For years, the idea that you must have 20% saved for a down payment has kept buyers on the sidelines. But in today’s market, that simply isn’t true — especially if you’re using a conventional or FHA loan.



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Let’s clear up the myths and break down your real options.

🧾 The 20% Down Payment Myth

It’s a common belief:


"You need 20% down to get a mortgage."

|While putting down 20% does help you avoid private mortgage insurance (PMI), it’s not required — and for most first-time buyers, it’s unrealistic.

✅ Real Down Payment Minimums (As of 2025)

Loan Type

Minimum Down Payment

FHA Loan

3.5%

Conventional

3% (first-time buyers), 5% (others)

VA Loan

0% (for eligible veterans)

USDA Loan

0% (rural areas only)

For a $500,000 home, 3% down is just $15,000 — not $100,000!

💡 Why Do People Still Say 20%?

  • To avoid PMI (private mortgage insurance)

  • To lower monthly payments

  • To increase chances of loan approval


But with today’s options and rates, putting down less can help you get into a home sooner — and still stay financially healthy.

🔍 Should You Put More Down If You Can?

It depends. Putting more money down may:

  • Reduce your monthly mortgage

  • Eliminate mortgage insurance sooner

  • Improve your loan terms

But it might also drain your savings — and leave less cash for repairs, moving, or emergencies.


The right down payment is whatever helps you buy safely without wiping out your financial cushion.

📉 How Mortgage Insurance Works

  • FHA loans have upfront and monthly mortgage insurance

  • Conventional loans only require PMI if under 20% down

  • PMI can often be removed once you reach 20% equity

📌 Tips to Make a Low Down Payment Work for You

  • Use gift funds from family (FHA and conventional allow this)

  • Ask the seller to help cover closing costs

  • Look into local first-time buyer programs or grants

  • Consider a rate buydown to offset PMI

💬 Final Thought

You don’t need 20% to become a homeowner in Southern California — and in many cases, waiting to save that much can cost you more in rising home prices and rent.

📞 Still unsure how much to put down — or which loan fits your goals? Let’s run the numbers together. 👉 Schedule a free consult or just message me anytime — I’m here to help.– Andrew Georgitsis, SoCal Realty and Investments

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