Do You Really Need 20% Down to Buy a Home? Let’s Clear This Up

If you’ve been scrolling Zillow and talking yourself out of home ownership because you don’t have 20% saved, you’re not alone.

I can’t tell you how many first-time buyers I talk to weekly who are convinced they need that magic number before they can even think about buying.

Here’s the truth: You don’t.

The 20% Myth

Just last month, I met with a couple in Franklin who had been renting for four years. They were disciplined, saved every month, and finally had $40,000 in the bank.

But they thought they were still short of the “required” 20% down. When I told them a conventional loan could get them in the door with just 3%, their jaws dropped.

They could have bought a house two years ago.
That’s how powerful this myth is—it keeps people sitting on the sidelines for no reason.

👉 Related reading: Mortgage Broker vs. Bank: What’s the Smartest Way to Get a Home Loan in 2025?

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The Actual Minimums

Here’s what the real numbers look like:

• Conventional loan: As low as 3% down through eligible programs such as Fannie Mae HomeReady (income limits apply) or for qualifying first-time buyers
• FHA loan: 3.5% down, with flexible credit requirements
• VA loan: 0% down for eligible veterans and active-duty service members

So instead of needing $60,000 for a $300,000 home, you might only need $9,000.
Or nothing at all if you're using VA benefits.

Big difference, right?

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If You Do Have 20% Saved

Now, don’t get me wrong—having 20% in savings is fantastic.

But you don’t have to pour it all into the down payment. A lot of our clients choose to:

• Keep part of it in savings for peace of mind
• Use some for updates or renovations after moving in
• Pay closing costs out of pocket
• Or even buy down their interest rate for a lower monthly payment

Sometimes, the smarter move isn’t putting every dollar into the down payment—
it’s keeping flexibility for later.

👉 Want to see how a broker can structure this? Check out our Broker vs. Bank article

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Don’t Forget About Closing Costs

Here’s something many first-time buyers don’t realize:

Your down payment isn’t the only expense.

Closing costs typically run 2–5% of the home price, covering things like:

• Appraisal
• Title insurance
• Prepaid taxes
• And other final steps to close the loan

I’ve seen buyers who only budgeted for the down payment hit a wall at closing.
It’s not fun—which is why we make sure you know the full picture upfront.

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The Smarter Way Forward

Bottom line: Don’t let the 20% myth hold you back.

Plenty of our clients have bought with 3%, 5%, or even $0 down.

What matters most is having a plan that:

✅ Fits your goals
✅ Keeps you comfortable after you move in

And that’s where we come in.

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Ready to See What’s Really Possible?

Skip the guessing.
Start with a quick pre-approval and get real numbers:

• What programs you qualify for
• How much you’ll need upfront
• How to make the most of what you’ve saved

👉 Pre-Approval  here with OnPoint Mortgage, LLC

👉 Prefer to talk it through? Book an appointment

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Because the smartest buyers aren’t the ones who waited until they had 20% They’re the ones who had the right strategy from the start.