The Truth About Down Payment Myths

One of the biggest barriers for many people dreaming of homeownership is the down payment. You’ve probably heard you need to save tens of thousands of dollars—or even 20% of the purchase price—before you can buy a home. The truth? That’s one of the most common myths in real estate. Let’s break down the facts so you know exactly what to expect.

Myth #1: You Need 20% Down to Buy a Home

Reality: While putting 20% down can help you avoid private mortgage insurance (PMI), it’s not required. In fact, most buyers—especially first-timers—put down far less.

• FHA loans require as little as 3.5% down.

• VA loans (for eligible veterans and service members) and USDA loans (for rural areas) offer 0% down payment options.

• Many conventional loans allow buyers to put down just 3–5%.

Myth #2: A Smaller Down Payment Means You Can’t Compete

Reality: While a larger down payment can strengthen your offer, it’s not the only factor sellers consider. Your pre-approval letter, financial stability, and offer terms also play a huge role. A good agent can help you write a strong offer—even with a lower down payment.

Myth #3: You Have to Use All Your Savings for the Down Payment

Reality: It’s risky to drain your bank account. Homes come with additional costs like closing fees, moving expenses, and ongoing maintenance. Smart buyers keep some cash on hand for unexpected repairs or emergencies.

Myth #4: There Are No Programs to Help With a Down Payment

Reality: Down payment assistance programs are more common than people realize. Many states, counties, and even cities offer grants or forgivable loans to first-time buyers. Your lender and agent can help you explore these options.

Myth #5: A Bigger Down Payment Is Always Better

Reality: While a larger down payment can lower your monthly mortgage payment, it’s not always the best financial move. If putting less down allows you to keep money in savings, pay off higher-interest debt, or cover future repairs, that can be a smarter choice in the long run.

Final Thoughts

The idea that you need a massive down payment to buy a home keeps too many people on the sidelines. The truth is, with the right loan program and guidance, homeownership could be much closer than you think. Before ruling yourself out, talk with a lender and a trusted agent—you might be surprised at your options.