Where Did the 20% Myth Come From?
Twenty percent is important because conventional borrowers below a certain equity level may need PMI.
But:
“PMI may apply below 20%”
is not the same statement as:
“You cannot buy below 20%.”
Example
$500,000 purchase:
- 3% = $15,000
- 5% = $25,000
- 10% = $50,000
- 20% = $100,000
Those differences can dramatically affect cash reserves.
Why Put More Down?
Potential benefits:
- Lower loan amount
- Lower payment
- Potentially lower PMI
- More immediate equity
Why Put Less Down?
Potential benefits:
- Preserve cash
- Maintain emergency reserves
- Keep money for repairs
- Invest elsewhere
- Avoid delaying purchase
What Is the Right Amount?
Ask the lender to model multiple scenarios.
For example:
- 5% down
- 10% down
- 20% down
Compare:
- Rate
- PMI
- Monthly payment
- Cash remaining
- Closing costs
Use the mortgage calculator and affordability calculator to see how the choices interact.
First-Time Buyers
Some conventional low-down-payment programs are specifically designed around first-time or income-qualified borrowers.
Eligibility rules vary.
Investor Properties
Do not assume primary-residence down-payment structures apply to investment properties.
Investor requirements can be significantly different.
For the property-side strategy, see Invest in Las Vegas.
How Lisa Helps
Your lender defines the loan scenarios; Lisa helps you shop within them.
A realistic down payment changes the price range, the monthly payment and the overall position. Lisa can help you target the property search at a level the approved financing can actually support, and can run a home value analysis or Property DNA report on homes you are considering.
