Unlocking Homeownership: What You Really Need for a Down Payment

Are your savings holding you back from buying a home?

You’re not alone. Many would-be buyers worry they need a massive 20% down payment to buy a home, but the truth might surprise you. In today’s market, plenty of homebuyers are putting down far less and still getting into their dream homes.

Looking for a home loan that fits your unique needs?

Check out Premia Mortgage to see how we can help you secure the best loan option for your situation—quickly and easily!

What Is a Down Payment?

A down payment is the upfront cash you pay when buying a home. It’s typically a percentage of the property’s purchase price. For example, if you’re purchasing a $300,000 house and make a 10% down payment, you’ll need $30,000 upfront. The remainder is covered by your mortgage loan, which you’ll pay off over time—with interest.

What’s the Minimum Down Payment for a House?

For conventional loans (not backed by the government), the minimum down payment is usually 3%. Keep in mind, though, if you put down less than 20%, you’ll likely need to pay for private mortgage insurance (PMI).

How Much Should You Put Down on a House?

While a 20% down payment is often recommended to avoid PMI and reduce your loan amount, you can absolutely buy a home with less—sometimes as little as 3% or 3.5% with certain loan programs.

But remember:

• PMI: If your down payment is under 20%, you’ll probably pay PMI, which adds to your monthly costs.

• Buying Sooner: Even with PMI, buying sooner allows you to start building equity and potentially benefit from rising home values.

Do You Really Need 20% Down?

Short answer: No!

While putting 20% down can help you avoid PMI and lower your monthly payments, it’s not a requirement—especially with loan programs like FHA and VA loans that offer much lower minimum down payments. Sometimes, these programs even require zero down!

The right down payment for you depends on your personal budget and financial goals.

Pros and Cons of a Smaller Down Payment

Pros:

• More Cash in Your Pocket: Save money for moving expenses, emergency funds, or home improvements.

•  Faster Homeownership: Enter the housing market sooner, which can be crucial in competitive markets.

• Competitive Interest Rates: With a strong credit score, you can still access attractive mortgage rates.

Cons:

• Higher Loan Amount: Smaller down payment means borrowing more—leading to higher monthly payments.

• PMI Required: Expect to pay Private Mortgage Insurance (PMI), which can increase monthly expenses.

• Slower Equity Growth: It may take longer to build equity compared to making a larger down payment.

Down Payment Requirements by Loan Type

• FHA Loans: Minimum down payment of 3.5%.

• VA Loans: 0% down for qualified veterans and service members.

• Conventional Loans: As low as 3%, depending on your credit and finances.

Our 2025 Homeownership Event is happening now!

Whether you have 3% saved or 20%, there’s a loan option for you! Get pre-approved online or give us a call at 866-591-0655 to chat about the best mortgage option for you—no obligations! Plus, for a limited time, get up to $1,500 in closing credits** and a free appraisal worth up to $750** when you mention this offer during the application for your personal mortgage.

Final Thought:

Don’t let myths about down payments keep you on the sidelines. The path to homeownership could be closer—and more affordable—than you think. Explore your options, get expert advice, and make your move with confidence!

*Premia Mortgage, LLC. does not provide tax advice. Please direct all tax-related questions to your tax adviser.

**Eligible borrowers can elect to have the fee built into their rate/APR and not pay it at closing, or pay the lender fee at closing and receive a commensurate reduction in their mortgage rate. Additionally, they will receive a complimentary appraisal credit up to $750. If a property qualifies for an appraisal waiver, the borrower’s transaction will not be eligible to receive the appraisal credit. Offers are available for loan applications dated from 05/01/2025 through 07/31/2025 at 11:59pm EST. Qualified participants must be considered a first-time home buyer (any individual who has not had a mortgage or owned a home in the past 3 years), a non-relocating employee, and be subject to credit and underwriting approval. This is not a commitment to lend. Restrictions may apply.

Qualified participants must access the Premia Relocation Mortgage website at https://www.premiarelocationmortgage.com/ to successfully complete a mortgage loan application and close the mortgage loan with Premia Relocation Mortgage. Applicants are subject to credit and underwriting approval. Restrictions may apply.

Premia Relocation Mortgage cannot guarantee that an applicant will be approved or that a closing can occur within a specific timeframe. All dates are estimates and will vary based on all involved parties level of participation at any stage of the loan process. Contact Premia Relocation Mortgage for more information.

Premia Relocation Mortgage is a private corporation organized under the laws of the State of Delaware. It has no affiliation with the US Department of Housing and Urban Development, the US Department of Veterans Affairs, the Nevada Department of Veterans Services, the US Department of Agriculture, or any other government agency. No compensation can be received for advising or assisting another person with a matter relating to veterans’ benefits except as authorized under Title 38 of the United States Code. Applicant is subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of the application does not represent an approval for financing or an interest rate guarantee. Restrictions may apply—contact Premia Mortgage, LLC. for current rates and more information.

All information provided in this publication is for informational and educational purposes only, and is not to be construed as financial, investment, or legal advice. Premia Mortgage, LLC. does not guarantee the quality, accuracy, completeness, or timeliness of the information provided. While efforts are made to verify the information, it should not be assumed to be error-free. Some information may have been provided by third parties and has not necessarily been verified by Premia Mortgage, LLC.

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