How Much of a Down Payment Do You Need?

by Michael Santiago

Buying a home, especially for the first time, can make you worry about saving enough for a down payment. But here's the good news: You might not need as much as you think.

Traditionally, buyers put down 20% of a home's price to avoid private mortgage insurance (PMI), which protects lenders if you stop making payments. For a $200,000 home, that means a $40,000 down payment. Without 20% down, you'll pay PMI, possibly around $150 a month.

However, you can qualify for conventional loans with as little as 3% down, or $6,000 for a $200,000 home. FHA loans require just 3.5% down if your FICO score is 580 or higher.

So, don't let down payment worries stop you from buying your first home.

You can also look at our downpayment assistance options here.