Loan Myth: You Need 20% Down to Buy a Home
One of the most common misconceptions I hear from buyers is that you must put 20% down to purchase a home. While that may have been more common years ago, it simply isn’t true today.
Conventional loans now offer options with as little as 3% down for qualified buyers. These programs are often ideal for first-time buyers, but they can also work well for repeat buyers who want to preserve cash.
The bigger question isn’t “Can I put 20% down?”
It’s “Should I?”
Putting more money down can reduce your monthly payment and eliminate private mortgage insurance (PMI). But tying up cash in a home isn’t always the best financial move—especially if that cash could be used for savings, investments, or future life events.
Every buyer’s situation is different. The right down payment strategy depends on your income, savings, timeline, and comfort level—not an arbitrary percentage.
Understanding your options early can make the buying process far less stressful and far more flexible.
Written by Dan Smith
Licensed Mortgage Loan Officer | Ruoff Home Mortgage
NMLS #2784335
Serving Bloomington & Monroe County, Indiana
Dan Smith | Senior Loan Officer 