%20-%20website.png)
How Much Should I Put Down on a House?
- Jacqueline OShaughnessy
- Jul 18
- 3 min read
By Jacqueline O'Shaughnessy, Loan Officer / Private Capital, NMLS #382900 — South Wind Financial, Inc, NMLS #9462 — Las Vegas, NV
One of the biggest questions homebuyers ask is,
"How much should I put down?" "What is the down payment?"
For years, many people believed a 20% down payment was required to buy a home. While putting 20% down can eliminate private mortgage insurance (PMI) on many conventional loans, it's far from the only option. The best down payment isn't always the largest one, it's the one that fits your financial goals.
Why Does the Down Payment Matter?
Your down payment affects several parts of your mortgage, including:
Your monthly mortgage payment
Your loan amount
Whether mortgage insurance is required
The amount of cash you'll need at closing
The money you'll have left in savings after you buy your home
Choosing the right down payment is about balancing affordability today with financial security tomorrow.
Common Down Payment Options
3% Down
Some conventional loan programs allow qualified buyers to purchase a home with as little as 3% down.
This option allows buyers to preserve more of their savings but usually results in a higher monthly payment and may require private mortgage insurance.
3.5% Down
FHA loans typically require a minimum down payment of 3.5% for qualified borrowers.
These loans are popular with first-time homebuyers because they offer flexible qualifying guidelines, although mortgage insurance generally remains part of the loan.
5% Down
A 5% down payment is a common choice for conventional financing.
Many buyers find it provides a good balance between keeping cash in the bank and reducing the monthly payment.
10% Down
Putting 10% down reduces the loan amount and monthly payment while allowing you to keep more money available for emergencies, home improvements, or future investments.
20% Down
A 20% down payment may eliminate private mortgage insurance on many conventional loans.
However, that doesn't automatically make it the best financial decision.
Bigger Isn't Always Better
Keeping money in your savings account can be just as important.
After moving into a new home, unexpected expenses often arise, including:
Furniture
Appliances
Repairs
Landscaping
Utility deposits
Emergency maintenance
Owning a home with no financial cushion can create unnecessary stress.
Seller Credits May Be a Better Strategy
Instead of using additional cash for a larger down payment, some buyers choose to negotiate seller credits.
Depending on the loan program and loan guidelines, seller credits may be used to:
Pay eligible closing costs
Purchase discount points to permanently reduce the mortgage interest rate
Help fund temporary interest rate buydowns, such as a 2-1 buydown
In many situations, lowering the interest rate can provide more monthly savings than making a slightly larger down payment.
Your mortgage professional can compare different financing options to help determine which strategy offers the greatest overall benefit.
Frequently Asked Questions
Is 20% required to buy a home?
No. Many loan programs allow qualified buyers to purchase a home with much less.
Is private mortgage insurance always bad?
Not necessarily. PMI allows many buyers to become homeowners sooner rather than waiting years to save a larger down payment.
Can I remove PMI later?
In many conventional loans, PMI can be removed once certain equity requirements are met and other loan conditions are satisfied.
Can seller credits lower my monthly payment?
Yes. Depending on the loan program, seller credits may be used to purchase discount points or fund temporary interest rate buydowns that can reduce your monthly payment.
How do I know which down payment is best?
Your mortgage professional can compare multiple loan scenarios and help you determine which option best fits your financial goals.
Ready to Take the Next Step?
Whether you're buying your first home, purchasing your forever home, or simply exploring your financing options, I'm here to help.
A quick 15-minute consultation can answer your questions, review your options, and help you determine the best loan strategy for your financial goals.
📞 Schedule a complimentary 15-minute mortgage consultation today. 702.429.3994
Final Thoughts
There is no one-size-fits-all answer when it comes to a down payment. For some buyers, putting more money down makes sense. For others, preserving cash, negotiating seller credits, or using available assistance programs may create a stronger financial position.
Rather than focusing on a specific percentage, focus on choosing a strategy that helps you become a homeowner while protecting your long-term financial health.
Continue Reading
All my best
Jacqueline O'ShaughnessyLoan Officer/Private Capital
South Wind Financial, Inc
6655 W. Sahara Ave., suite D114
Las Vegas, NV 89148
702-429-3994 cell
702-543-7535 eFax
Company NMLS #9462
Agent # 382900
Agent license #6603
CA-DFP1382900
AZ 1032777
FL L0101736
This was eye opening.
I found this blog to be particularly interesting as my daughter will eventually be purchasing a home. I always thought 20% was the way to go. Now, I can see that isn’t the case and there are many other things and amounts to consider when determining the downpayment. Thank you Jacqueline!!!