One of the Biggest Misconceptions in Home Buying

Benjamin Yocca says one of the biggest misconceptions he hears from first-time buyers is that they need twenty percent down to buy a house. You do not. Many people put off their home search for years because they believe they must save a huge down payment first, when plenty of loan programs are built for buyers with much less.

Low Down Payment Options That Exist

Some conventional loans allow as little as three percent down. FHA loans allow three and a half percent. If you qualify for a VA or USDA loan, you could put zero down. Eligibility, pricing, and terms vary by program, borrower, and property, so it is worth reviewing which options fit your situation.

Mortgage Insurance Is Part of the Conversation

Putting down less than twenty percent often means mortgage insurance may be part of the equation. That cost is real, and it should be weighed honestly. But it is only one piece of the picture. On a conventional loan, mortgage insurance can typically be removed once you build enough equity, and many buyers find the tradeoff worthwhile to get into a home sooner.

Keeping Money in the Bank Matters Too

Benjamin points out that the other side of the equation is keeping money in the bank for emergencies. Homeownership brings surprise repairs, appliance failures, and other expenses that renters often do not face. Emptying your savings to make a larger down payment can leave you exposed right when you become a homeowner.

The Goal Is Not Necessarily 20% Down

The real goal is not necessarily twenty percent down. It is buying a home without leaving yourself without proper reserves. A smaller down payment with a healthy cushion can be a stronger position than a larger down payment with an empty savings account.

Let’s Figure Out What Makes Sense for You

If you are thinking about buying, reach out to Benjamin Yocca to walk through your options and find the down payment strategy that fits your budget and goals.

Sources

NAR.realtor
ConsumerFinancialProtectionBureau.gov
Fanniemae.com
HUD.gov
USDA.gov