The Biggest Mortgage Myth That’s Still Confusing Buyers in 2025

If you’ve been thinking about buying a home, there’s a good chance you’ve heard this:

“You need 20% down to buy a house.”

It sounds responsible. It sounds safe.

But in 2025, it’s simply not true — and believing it is keeping a lot of buyers stuck on the sidelines.

As a loan officer with 22 years of mortgage servicing and lending experience, I see this myth stop good people from becoming homeowners every day.
Here’s the real story — explained simply.

Myth: You need 20% down.

Reality: Most homebuyers put down far less.

Across Colorado, Nebraska, and Wyoming, most buyers put down:

3%–5% with conventional loans
3.5% with FHA
0% with VA and USDA
0–3% with many down payment assistance programs, including CHFA

Your down payment depends on your situation — not outdated assumptions.

Where did the 20% number even come from?

Years ago, lenders wanted 20% down to avoid private mortgage insurance (PMI).

Today:

PMI is more affordable
It’s temporary
It can be removed
And it’s often cheaper than continuing to rent

PMI is not a penalty — it’s a tool that helps people buy sooner.

Why saving 20% can cost you more

Here’s what usually happens when people wait:

Home prices rise
Rents increase
Interest rates move
The down payment you saved is no longer “enough”
You end up paying more later for the same house

Buying with 3%–5% down today often costs less than renting for two more years.

What matters more than your down payment

Lenders look at these factors:

Monthly payment comfort
Credit score
Income stability
Debt-to-income ratio
Cash reserves

The down payment is just one piece of the puzzle.

Low- and no-down-payment options that work in 2025

✔ Conventional 3% Down

For first-time buyers or anyone with solid credit.

✔ FHA 3.5%

Flexible guidelines, great for many buyers.

✔ USDA 0% Down

For eligible rural and small-town areas.

✔ VA 0% Down

For eligible Veterans and active-duty service members.
One of the best programs in the country.

✔ Down Payment Assistance Programs

Including CHFA and other state/county programs that help cover upfront costs.

Bottom Line

The idea that you need 20% down is one of the biggest reasons people delay buying a home — and it’s rarely necessary.

If you’re curious what you actually need, I can run your numbers quickly and show you clear, accurate options.

No pressure. No commitment.

Just information that helps you move forward confidently.

Want me to run your numbers?

Choose what works for you:

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