“I Get This Question All the Time”: Do I Need a 20% Down Payment?

In today’s segment of “I Get This Question All the Time”, I’ll be tackling the question of whether or not a homebuyer needs to make a 20% down payment on their loan.

The short answer is: Absolutely not. There are programs that don’t require 20% down requirement and that will permit you to buy with a smaller down payment. You can put down as little as 3% with a conventional loan or 3.5% with an FHA loan.

Outside of that, veterans can buy a home for 0% down through a VA loan, and a USDA loan asks for nothing down as well if you the home is situated in a rural area.

You will want to talk to a loan professional about all of your options, though. Buying into the belief that you’ll need to come up with 20% down and, as such, staying sidelined, may actually cost you in the long run.  

Let’s say, for the sake of argument, that you deferred the opportunity to get into the market now so that you could give yourself time to come up with 20%. Then, two years go by. In that time, a $400,000 home has gone up 5% year over year, making it $440,000.

In short, sometimes you’re better off being decisive and acting sooner rather than later to get into the house that you want. It’s very important to ask your loan officer to run through all the different scenarios with you. If have any questions for me, feel free to reach out and give me a call at 970-672-0010 or email me at [email protected]. I’d love to have a conversation with you!

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