Why Does Everyone Think 20% Is Required?
Because 20% is an important threshold in many conventional-mortgage conversations, particularly around private mortgage insurance.
Over time, that became distorted into: "You cannot buy without 20%."
That is incorrect.
The lender decides which program and requirements apply to your situation.
What Is the Down Payment?
If a home costs $500,000:
- 20% = $100,000
- 10% = $50,000
- 5% = $25,000
Those examples illustrate why the down-payment percentage dramatically changes the amount of cash needed upfront.
Actual financing requirements depend on the loan.
What Options May Require Less?
Depending on eligibility:
Conventional Loans
Some conventional programs permit qualified buyers to finance with considerably less than 20% down.
FHA
FHA-insured financing can permit high loan-to-value financing for qualifying borrowers, subject to current FHA requirements.
VA
Eligible veterans, service members and certain surviving spouses may have VA-backed purchase options with no required down payment in qualifying circumstances. See our VA home loans guide for Nevada buyers.
USDA
Eligible borrowers purchasing qualifying properties may have access to USDA-backed financing offering 100% financing under current program rules.
Why Would Someone Put 20% Down Anyway?
Potential reasons include:
- Lower loan balance
- Lower monthly principal/interest
- Potential mortgage-insurance advantages
- Stronger equity position
- Offer strategy
- Personal financial preference
Why Might Someone NOT Put 20% Down?
Because putting every available dollar into the property may leave little money for:
- Emergency reserves
- Moving
- Repairs
- Furniture
- Renovations
- Investments
- Business needs
A lower down payment can sometimes preserve liquidity.
That does not automatically make it the better choice. It makes it an option worth comparing.
Don't Forget Closing Costs
A $50,000 down payment does not necessarily mean $50,000 is all you need to close.
Buyers may also have:
- Closing costs
- Prepaid expenses
- Escrow funding
- Inspections
- Appraisal-related costs
- Other transaction expenses
Your lender/settlement provider should provide actual figures. See what buyer closing costs include.
What About Seller Concessions?
Depending on loan rules and the transaction, seller concessions may sometimes help with qualifying buyer closing costs.
That can make offer structure important.
A buyer who needs help with closing costs may not necessarily need the lowest possible purchase price.
Sometimes the better structure is a negotiated seller contribution.
Example
Suppose you have $60,000 available.
Instead of automatically putting every dollar into the down payment, you might compare lender-approved structures that preserve money for closing and reserves.
The right answer depends on:
- Loan
- Payment
- Mortgage insurance
- Rate
- Cash needs
- Financial goals
How Lisa Helps
Lisa can coordinate with your lender when structuring the offer so the real estate contract supports the financing strategy.
She does not determine the required down payment.
