If You Think You Need a 20% Down Payment to Buy a Home, You Might Be Ready to Buy Sooner Than You Think

Imagine you had to become a real estate agent tomorrow and help someone buy a house from start to finish. Think you’d know everything you need to know?

Even if you feel pretty confident, there’s a good chance you’d run into a bit of a learning curve. There are a lot of moving parts in a real estate transaction, and most of what people know about the process tends to come from bits and pieces they pick up along the way.

So it’s not all that surprising that, according to a recent survey from HousingWire, about 85% of homeowners said they wished they knew more before buying.

Most of them probably did some homework and learned a lot as they went. But looking back, they realized there were things they would’ve liked to understand ahead of time.

One of the biggest takeaways from the survey is that 13% of respondents believed they needed a 20% down payment to buy a home.

That’s kind of surprising when you consider how often this topic comes up. It’s something agents talk about all the time, post about on social media, mention in conversations… to the point where it starts to feel like common knowledge.

But clearly, it’s not something every home buyer (or potential home buyer) knows.

So if you take nothing else away from this article, just know that you likely do not need 20% down to buy a house.

Why Do People Still Think They Need to Put 20% Down?

Years ago, putting 20% down was almost always required. Lending guidelines were tighter, loan options weren’t as flexible, and in many cases, that was just what buyers were expected to bring to the table.

Over time, loan programs evolved, new options became available, and buyers started purchasing homes with far less money down than they used to.

But somehow the idea that you need a 20% down payment never entirely went away.

Part of that is likely because it’s still the benchmark for avoiding private mortgage insurance (PMI), which can lower your monthly payment. So it can come across as somewhat of an ideal thing to do.

In reality, though, most buyers are putting down quite a bit less. In fact, the survey found that 72.6% of respondents put down 10% or less when they purchased their home.

That Belief Could Be the Only Thing Stopping You From Buying a Home

Based on those numbers, it’s pretty clear that a lot of buyers do figure out at some point that they don’t actually need 20% down. They get into the process, start asking questions, talk to the right people, and somewhere along the way, that misconception gets cleared up.

But what if you never get that far?

While plenty of buyers eventually learn they don’t need as much for a down payment as they first believed, there are likely a lot of potential homeowners sitting there thinking they need to hit that 20% mark before they can even start the conversation.

Maybe you’re actively saving and assuming it’s going to take years. Or maybe you’ve just written it off altogether and figure it’s not even worth exploring yet. And if that’s the case, that belief alone could be the thing holding you back from finding out what’s actually possible.

The reality is, what you qualify for depends on a lot of variables—income, credit, loan programs, and more—but the only way to really know is to explore it.

That’s where talking to a real estate agent can make a big difference. They can help guide you, connect you with the right professionals, and walk you through not just down payment options, but the entire process.

Don’t feel like you need to wait until you’re “ready” or have a full down payment saved before reaching out. The earlier you start the conversation, the better.

Even if buying a home is just something you hope to do someday… that day may be sooner than you think.

The Takeaway:

A recent survey found that most homeowners wish they had known more before buying. One of the biggest misconceptions was about down payments. A surprising number of people still believe they need 20% down, even though most buyers are actually putting down far less.

While plenty of buyers eventually learn they don’t need as much for a down payment as they first believed, there are likely a lot of potential homeowners sitting there thinking they need to hit that 20% mark before they can even start the conversation.

If that sounds familiar, it may be worth reaching out to an agent and starting the conversation sooner than you think. You don’t need to have a down payment fully saved before reaching out—and you might even find that buying a home is more within reach than it seems.