The 20% Myth

The biggest barrier to homeownership is a myth. You do not need 20% down to buy a home.

FHA loans require as little as 3.5% down. Conventional loans can go as low as 3%. VA loans (for veterans) and USDA loans (for rural areas) offer 0% down.

The catch depends on the loan type. On conventional loans with less than 20% down, you usually pay Private Mortgage Insurance (PMI) — often around 0.5-1% of the loan annually. On a $300,000 loan, that's roughly $125-$250/month, and PMI can usually be canceled as equity grows.

FHA loans use mortgage insurance premiums (MIP), not PMI. With 3.5% down, annual FHA MIP often lasts for the life of the loan unless you refinance. VA and USDA loans have their own fee structures. Mortgage insurance is not ideal, but it is not always a dealbreaker.