What’s Really Stopping People From Owning a Home?

If you’ve been thinking about buying a home in Houston, chances are you’ve heard the advice: “You need 20% down.” For many people, that number feels intimidating — sometimes even impossible. And unfortunately, this myth has kept countless potential buyers from even starting their home search.

The truth? You don’t always need 20% down to buy a house. In fact, many buyers are purchasing homes with far less. Let’s break down why the myth exists, what the real requirements look like, and how you can get started on your homeownership journey sooner than you might think.

Why 20% Became the “Magic Number”

For decades, 20% was the standard down payment. And it’s true — putting 20% down can offer benefits:

• Lower monthly payments: The more you put down, the less you need to borrow.

• No PMI: With 20% down, you avoid private mortgage insurance, which is an extra monthly fee lenders add when you put less down.

• Better interest rates: Lenders often reward larger down payments with slightly lower rates.

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So yes, 20% is a strong option if you have the funds available. But it’s not the only way to buy a home.

The Reality: Options Start at 3%

In today’s market, many loan programs allow for much smaller down payments:

• Conventional Loans – Some allow as little as 3% down, especially for first-time buyers.

• FHA Loans – Backed by the Federal Housing Administration, these typically require only 3.5% down.

• VA Loans – For veterans and active-duty service members, VA loans often require zero down.

  USDA Loans – Available in qualifying rural areas, these also allow zero down.

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For a $300,000 home in Houston, here’s the difference:

• 20% down = $60,000

• 3.5% down = $10,500

• 3% down = $9,000That’s a game-changing difference for many families.

Why This Matters in Houston’s Market

Houston’s real estate market is diverse — from first-time buyer homes in Katy and Cypress, to luxury properties in Memorial and River Oaks, to new construction in East Downtown. Prices vary, but the common thread is this: waiting years to save 20% can mean missing out on opportunities.

While you’re saving, prices and interest rates can rise. By the time you reach 20%, the market may have moved further out of reach. Starting with a smaller down payment lets you begin building equity sooner, even if it means carrying PMI for a few years.

What About PMI?

Many buyers worry about private mortgage insurance (PMI). It’s true that if you put less than 20% down, you’ll likely pay PMI as part of your monthly payment. But here’s the important part: PMI isn’t forever.

On conventional loans, once you reach 20% equity in your home, you can often request to have PMI removed. And for many people, the cost of PMI is worth it if it allows them to buy a home years earlier than if they waited.

The Smart First Step: Pre-Approval

Instead of focusing on the 20% myth, focus on your personal situation. Getting pre-approved with a lender is the best way to find out:

• What loan programs you qualify for

• How much you’ll need for a down payment

• What your monthly payment will look like

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This takes the guesswork out and helps you shop for homes with confidence.

Don’t Let Myths Hold You Back

Homeownership is one of the best ways to build long-term wealth. In Houston, where housing options are wide-ranging and competitive, waiting years to save 20% down could mean missing the perfect home in the perfect neighborhood.

The reality is simple: the 20% down payment is a myth for most buyers. Explore your options, connect with a lender, and see what’s possible for you today.

Ready to Explore Your Options?

If you’re curious about how much you really need to buy a home in Houston, let’s talk. I can connect you with trusted local lenders, explain the programs available, and guide you through the process step by step.

Bottom line: Don’t let the 20% myth keep you on the sidelines — your path to homeownership might be closer than you think.

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