Mortgage Myth #1: Is 20% Down Required to Buy a Home?

What is one of the scariest parts of buying the home? Undoubtedly, the prospect of putting 20% cash down. This antiquated practice still remains a staple in real estate transactions nowadays, despite the fact that only 39% of house-hunting millennials are able to afford the recommended down payment. With this inability to pay a down payment comes an inevitable downturn in the purchasing market, with many deciding to rent instead. But the title of this blog post hints at something not many first-time buyers know

Mortgage Myth #1: Is 20% down required to buy a home? FALSE!

According to the National Association of Realtors, a lower, more affordable down payment of 11% (or less) is becoming the new norm – but be aware that there are other loan program options that could help you manage this expense further.

Aside from saving a bunch of cash, there are some important reasons you might want to consider NOT paying 20% down on a new house:

  • Freeing Up Money for Renovations: It’s very rare that people purchase homes without having at least something they’d like to redo or renovate. Whether a relatively small job (repainting a bedroom) or a large endeavor (completely renovating the kitchen), having that extra spending cushion can help make those renovations happen faster and without as much financial stress!
  • Purchasing a Home Sooner: The earlier you are able to purchase a home, the more likely you are able to avoid the continuously-rising home prices. Making the switch from renting to home ownership is a great financial accomplishment!

First: Buy A House In Your Budget

This is an important factor that many first-time homeowners will need to keep a close eye on. Separating emotions from reality can become difficult when visiting open houses and searching for listings online; it’s essential that you know for sure that you will be able to afford the home down the line. A great tool is utilizing a mortgage calculator which can help you determine whether a particular home is doable for you and your family. 

Now, what are some ways you can avoid paying 20% down on a new home?

new homeowners wonder is 20% down required to buy a home?

Speak To Your Advisor

The best thing you could do is speak to a financial service representative regarding alternative ways to finance your mortgage either with or without a down payment involved. The more individualized your service, the more helpful they can be to recommend the best path. It’s important to take into consideration a lot of different factors (location of new home, your family’s income, etc), and having someone dedicated to you will help find customized opportunities that could potentially save you money in the long run.

VA Mortgage

If you are, or were, a member of the military, there are loan programs specifically meant to assist you. Occasionally it can be difficult for a military family to purchase a home due to relocation possibilities or for financial reasons – in some cases, VA Mortgage Loans can offer 0% down payment. Eastex loves working with our valued military and can help figure out a plan that works for you.

Physician Mortgage Loan

If you are in the medical field, it’s important to check out industry-specific loan options that are available to you. For example, a specific type of loan for medical professionals (physicians, dentists, etc) called a Physician Mortgage Loan requires zero down payment as well as some other provisions that would make purchasing a house easier. This type of loan was created to assist students who are heavily burdened with student loans but have the prospect to pay back their loans in full in a shorter amount of time.


Applying for a mortgage loan is a big milestone, but an exciting one as well! While traditional mortgages are still a great choice for a lot of families, (Eastex offers up to 95% financing with approved credit), you do have other options available to you. For the best rates and mortgage plan, trust Eastex Credit Union. If you’re ready, click here to apply for a mortgage loan with Eastex today!

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