Going the conventional loan route? A 20% home down payment is no longer the norm.
One caveat to putting anything less than 20% down: You’ll need to pay for Private Mortgage Insurance (PMI) so your lender is covered in case you miss a mortgage payment.
One of the biggest misconceptions in home buying is the bigger down payment the better. Berenice Perez, Bungalo Mortgage VP of Consumer Experience, says that isn’t always the case. “I always advise buyers to leave themselves a savings cushion whenever possible,” says Perez. “If putting 20% down means you have to liquidate your entire savings, then I would highly encourage you to consider putting less down,” says Perez.
Pre-approved for a conventional mortgage? It’s actually possible to put as little as 3% down. It’s not all or nothing either: With many conventional lenders, you can now opt for a 5%, 10%, or 15% down payment too. At the end of the day, it just depends on what home you want to buy (location, mortgage value) and what makes sense for your own individual financial situation (savings, household income, credit history, debts).