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Writer's pictureMargaret Dutton

Do I Really Need to Put 20 Percent Down?



Though 20 percent has traditionally been the ideal amount to put as a down payment, the notion that you must do so to qualify for a home loan is simply not true.

In fact, according to the National Association of Realtors®, first-time homebuyers in 2022 put down an average of 6 percent, while repeat buyers typically put down an average of 17 percent.

Different loan programs come with varying down-payment requirements, so how much you can afford will influence the type of loan you qualify for. Whether you’re a repeat or a first-time homebuyer, the following guide can help you understand your options and discover the best one for your budget.


Conventional loan

These are usually the most popular types of loans; each comes with varying requirements related to the amount of your down payment, income, and credit.


Conforming As a general rule, the maximum amount you can borrow on a conforming loan is $726,200, though this limit can be higher in more expensive markets. Depending on your location, credit score, and home price, you can put down as little as 3 percent.


Nonconforming If your home loan needs exceed the conforming loan limit, you must apply for a nonconforming one. This option necessitates a minimum of a 20 percent down payment, which may lead to a higher interest rate.


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