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You Can Buy a House Without 20% Down

How much of a down payment do you really need to buy a home? Saving up a down payment is one of the biggest obstacles for most people when buying a home. You may have heard the old rule that you need to save 20% down to buy a home.

44% of Americans believe you need a down payment of 20% or more to buy a home. But that’s not actually true. You can buy a home for less—sometimes, a lot less. In fact, the average first-time buyer puts just 7% down, while the average buyer puts 13% down.

What is a Down Payment?

If you’re not going to buy your home with cash, you’ll need a mortgage. While some loans will actually allow you to buy a home with a 0% down payment, most loans require you to put at least some money down.

If you purchase a $200,000 home and put $20,000 down, you have a 10% down payment. 20% down would be $40,000, which is quite a chunk of change to save up. Good thing it doesn’t have to be that much!

A Down Payment Impacts Your Monthly Payment

How much money you put down impacts your monthly payment. So if you want a lower monthly payment, put more money down.

Not only are you borrowing less money from the lender, but putting more money down means that you will likely have access to better interest rates. Better interest rates also lower your monthly payment.

Lower Down Payment Options

There are several well-known low down payment loan options. There are sometimes other low down payment loan programs, as well, depending on what’s available when you’re looking for a home.

VA Loan

If you served in the military for the minimum amount of time (90 days during wartime, 181 days of active duty during a peaceful time, or 6 years in the Reserves), you can get a home loan with 0% down and limited closing costs.

Interest rates for VA loans are often lower than they are for conventional loans because these loans are backed by the government, reducing the risk for the lender.


A USDA or Rural Housing loan allows you to get a home with 100% financing. This program encourages people to buy in rural areas as well as some suburban areas that aren’t densely populated.

Interest rates for USDA loans are often lower than they are for conventional loans because they are backed by the government, reducing the risk for the lender.

FHA Loan

An FHA loan is geared toward low- and moderate-income buyers who don’t have ideal credit or a lot of money for a down payment. This loan program allows you to buy a home for just 3.5% down.

Conventional 3% Down Programs

There are also a couple of 3% down programs that allow you to put less down on a home. If you’re interested in this option, let’s sit down and see what might work for you and your situation!

Private Mortgage Insurance

If you don’t put at least 20% down on a home, you’ll most likely pay private mortgage insurance (or PMI), though this isn’t always the case. (VA and USDA loans do not have PMI, for instance.)

PMI protects the lender in case you default on the loan, and the premium is usually added to your monthly payment.

However, paying PMI isn’t necessarily a bad thing. Trying to avoid it can actually cost you in the long run if you put off purchasing a home while you’re trying to save 20% down.

Need Some Help?

If you’re wanting to buy a home but aren’t sure how much you’re going to need to put down, give us a call! We have a lot of options and might be able to get you into a home sooner than you think.

“I had the best experience with CSMC Mortgage. Buying a home is very stressful with all of the paperwork that has to be filled out. Faye was amazing! I have given several people her contact info, who are scared to take the step to homeownership. She took ALL of the stress away for me. I honestly, didn’t have to do much. She accommodated my crazy work schedule and help me get things done in a timely manner. She made me feel so comfortable and at ease. There were no surprises when it was time to sign and pay. I highly recommend her to anyone in need of her services and guidance. I can’t thank her enough.”

- Lisa M.

“These folks are conscience and easy to work with. The “calm” as the “storm” of home loans rolls through! I would not use anyone else. They make sure ALL your questions are answered, be that what competitors may have offered, or ads you may have heard or seen. What a pleasure to do business with. Thank you team CSMC.”

- Michael G.

“With this being my first home purchase, my loan officer was very good at explaining everything to me and helping me with all my needs. Thank you for having such great people in the right place!”

- Cathleen H.

“Baret Grigorian was amazing!! From start to finish Baret was there to help in every way. I never felt like I had to call him to follow up on my loan transaction and he always kept me informed. He was able to get me great financing rates, a lower payment AND money back! Thank you Baret!! I look forward to working with you again in the future!!”

- Kenny D.

“This review is about Mark and Darci Richardson from CSMC Mortage in Simi Valley. This team is the BEST! For the past 12 years our home was "underwater" due to the "crash" in 2007, and unable to do anything with the mortgage except pay it. These two kept on top of things and finally the house qualified to REFI. We just completed everything and it closed last week... and they saved us over $900 a month!! That's a huge savings for a couple of senior citizens! We are SO happy now and finally can breathe. Thanks to Mark and Darci and CSMC Mortgage for following through, jumping through all the hoops necessary and helping us out! I can't recommend them more... they are the BEST!!!”

- Shari S.

“Faye helped me purchase my first home last year. She was very professional and worked very quickly to help me procure financing. She made herself available around my schedule and took the time to explain my options for financing to help me get the lowest rate possible. Would highly recommend her to anyone looking for someone that is professional, highly knowledgeable, polite, and responsive.”

- James Z.

“David Honda and his team rocked!! They had great technology that took so much of the pain of home buying away. They were attentive to our specific needs and were on top of our loan process! David was always available, even when he was in Hawaii, and super responsive! Thanks David, Melissa and the team for an easy and great home buying experience.”

- Raymond F.

“CSMC Mortgage took great care of us and our home buying needs. Tony was more than we could have ever asked for, he went above and beyond for us and we couldn’t have been more grateful for all his hard work. CSMC Mortgage has a great and friendly staff, I would highly recommend them to anyone looking into buying a home.”

- Jannet A.