Myths About 20% Down That Need Busting

For decades, one piece of homebuying advice has echoed louder than the rest: “You need 20% down to buy a house.”

While that might have been true in the past—or might still be ideal in some cases—today’s mortgage landscape offers far more flexibility. At Rapid Home Loan, we hear this myth almost daily, and we’re here to set the record straight.

🚫 Myth #1: You MUST Put 20% Down to Get a Mortgage

Reality: Not even close. Today, there are many loan programs that allow qualified buyers to put down far less:

FHA Loans: As little as 3.5% down
Conventional Loans: Some require just 3% down
VA Loans: 0% down for eligible veterans and active-duty service members
USDA Loans: 0% down for rural or qualifying areas

At Rapid Home Loan, we help clients find the right loan for their situation—many of which require far less than 20%.

💸 Myth #2: Less Than 20% Down = Can’t Afford a Home

Reality: Many financially responsible buyers choose a lower down payment to keep cash on hand for:

Emergency funds
Home improvements
Moving expenses
Investments or savings

Buying with less than 20% down doesn’t mean you’re not ready. It means you’re being strategic with your money. And we can help you make sure it’s a smart move.

🧾 Myth #3: If You Don’t Put 20% Down, You’ll Get Denied

Reality: Loan approval depends on several factors—credit score, income, debt-to-income ratio—not just the size of your down payment. Many buyers with strong credit and stable income get approved with 3–10% down.

Our mortgage advisors at Rapid Home Loan evaluate your full financial picture to find what works best for you—not what outdated myths say you “should” do.

🛑 Myth #4: You Can’t Avoid PMI Without 20% Down

Reality: It’s true that Private Mortgage Insurance (PMI) typically applies when you put less than 20% down. But here’s what many people don’t realize:

PMI isn’t forever – It can be removed once you reach 20% equity.
Some loan types (like lender-paid PMI) can offer competitive rates with no monthly PMI.
In some cases, PMI is a small price to pay for getting into a home sooner rather than later.

We’ll break down the costs, benefits, and options so you can make an informed decision.

🕰️ Myth #5: It’s Better to Wait and Save for 20%

Reality: While saving is always smart, waiting too long can cost more in the long run. Why?

Home prices may rise while you’re saving
Interest rates may increase, making your future payment higher
You miss out on building equity sooner

Sometimes it’s better to buy now with a smaller down payment and start building wealth through homeownership.

✅ The Bottom Line

You can absolutely put 20% down—but you don’t have to. The right down payment is the one that fits your finances, your goals, and your timeline.

At Rapid Home Loan, we’ll walk you through all your options, run the numbers side by side, and help you make the best choice for your situation—not one based on outdated advice.