Standard Down Payment Amounts

Conventional wisdom suggests 20% down to avoid PMI. However, FHA loans allow 3.5% down, VA loans require no down payment, and many conventional programs accept 5-10% down with appropriate credit scores.

PMI and Its Costs

PMI protects lenders if you default. It typically costs 0.5-1% of your loan amount annually. On a $400,000 loan, this equals $2,000-4,000 yearly in additional costs.

Strategic Considerations

Lower down payments preserve cash for emergency reserves and investing. Higher down payments reduce monthly payments and eliminate PMI. The optimal amount depends on your financial situation.

Brian Cooper

Principal REALTOR® with over 20 years of experience in Los Angeles and Ventura Counties real estate. Dedicated to helping families find their dream homes and investors maximize their portfolios.