One of the biggest myths in real estate is that you need a 20% down payment to buy a home.
At The Craig Hartranft Team, we regularly meet potential buyers who have delayed their homeownership goals because they believe they need tens of thousands of dollars saved before they can even start looking at homes.
The truth is that many buyers in Lancaster County purchase homes with significantly less than 20% down. Depending on your financial situation and loan program, you may already be closer to homeownership than you think.
Where Did the 20% Down Myth Come From?
The idea of putting 20% down isn’t completely made up. Historically, a 20% down payment helped buyers avoid Private Mortgage Insurance (PMI) and often resulted in more favorable loan terms.
While putting 20% down can still have benefits, it is no longer a requirement for most homebuyers.
Today, many loan programs are specifically designed to help buyers purchase a home with a much smaller down payment.
Common Loan Options Require Less Than 20% Down
Many buyers are surprised to learn that several popular loan programs allow lower down payments.
Examples may include:
- Conventional loans with low down payment options
- FHA loans with lower minimum down payment requirements
- VA loans for eligible veterans and service members
- USDA loans for qualifying rural properties
The best loan option depends on your financial situation, credit profile, and homeownership goals.
Why Waiting for 20% Can Sometimes Cost More
Many buyers spend years trying to save a full 20% down payment.
During that time:
- Home prices may increase
- Interest rates may change
- Rent payments continue without building equity
- Buying power may decrease
In some situations, waiting to save a full 20% can actually make homeownership more expensive over the long term.
What Costs Should Buyers Plan For?
Even if you don’t need 20% down, it’s important to prepare for the costs associated with buying a home.
These may include:
- Down payment
- Closing costs
- Earnest money deposit
- Moving expenses
- Initial maintenance or repairs
Understanding these costs early can help buyers create a realistic savings plan.
The First Step Is Getting Pre-Approved
Rather than guessing how much you need, one of the smartest first steps is meeting with a trusted mortgage professional.
A lender can help you understand:
- Your purchasing power
- Available loan programs
- Estimated monthly payments
- Required down payment options
- Potential closing costs
Many buyers discover they are qualified sooner than they thought.
At The Craig Hartranft Team, we regularly connect buyers with experienced local lenders who can explain financing options and help determine the best path forward.
Frequently Asked Questions
Is it better to put 20% down if I can?
In many cases, yes. A larger down payment can reduce monthly payments and may eliminate mortgage insurance. However, it isn’t required to buy a home.
Can first-time buyers purchase with less than 20% down?
Absolutely. Many first-time buyers successfully purchase homes using low down payment loan programs.
Will I pay mortgage insurance if I put less than 20% down?
Depending on the loan type, mortgage insurance may be required. A lender can explain how this affects your monthly payment.
Should I wait until I save more money?
That depends on your financial situation and goals. Speaking with a lender can help you determine whether buying now or waiting makes more sense.
Final Thoughts
If you’ve been putting off homeownership because you think you need a 20% down payment, it may be worth taking a closer look at your options.
Many Lancaster County buyers purchase homes with significantly less money down than they expected. The key is understanding the loan programs available and creating a plan that works for your financial goals.
At The Craig Hartranft Team, we help buyers navigate every step of the process—from connecting with trusted lenders to finding the right home. If you’re wondering whether you’re ready to buy, the answer may be closer than you think.