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Do You Really Need 20% Down to Buy a Home?

The 20% down payment rule has long been a golden standard in real estate—but is it truly required in today’s market? The short answer: not always. Let’s break down what you actually need to know.


🏡 The Myth of the 20% Down Payment

While putting 20% down can help avoid private mortgage insurance (PMI) and lower your monthly payments, it’s not mandatory. Many buyers—especially first-timers—are securing homes with far less.


💸 Low Down Payment Loan Options

Several loan programs allow you to buy with as little as:

  • 3% down with a conventional loan (HomeReady or Home Possible)

  • 3.5% down with an FHA loan

  • 0% down with VA or USDA loans (for eligible buyers)

These programs make homeownership more accessible, especially in competitive markets like Sacramento.


🧾 Pros of Putting Less Than 20% Down

  • You can buy sooner without waiting to save tens of thousands

  • You retain more cash for repairs, furnishings, or emergency savings

  • You may still qualify for competitive rates depending on your credit


⚠️ Cons to Consider

  • You’ll likely need to pay PMI (until you reach 20% equity)

  • Higher monthly payments due to a larger loan balance

  • You may face stricter lending requirements or higher interest rates


✅ The Bottom Line

You don’t need 20% down to buy a home—but you do need to understand the trade-offs. The best strategy depends on your budget, credit profile, and long-term financial goals. Working with a knowledgeable lender or real estate advisor can help you find the right fit.


Scott Sweeney

Your NorCal Realtor

M&M Real Estate

BRE Lic# 01938720

Cell: Call/Text 707-330-2324


About Scott Sweeney


SweeneySells

Full Time Realtor 13 Years +

Over 100 Families Served

Top 5% Producing Agent

Buying & Listing Specialist

Contract & Negotiation Ninja

CSUS Business & Marketing Graduate 2006


With quickly serving over a 100 families, Scott Sweeney has become a top 5% producing Realtor in the greater Sacramento area who has helped clients from the Bay Area to South Lake Tahoe. Scott has a Bachelor Of Science in Business Administration, with a concentration in Marketing from CSUS. His education, and extensive background in the hospitality, marketing, and real estate industries, have helped Scott to become one of the leading, and most sought after agents in the area.


Reach out to SweeneySells today, and take the first step towards your real estate goals!

📞707-330-2324




Top Producer 2016-2023


"I appreciate your business & referrals!"


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