The 20% Myth

You've probably heard that you need 20% down to buy a home. That came from a time when conventional mortgages required it, and it stuck around in the cultural memory long after it stopped being true. The reason some people still aim for 20% is to avoid PMI (private mortgage insurance). That's a legitimate financial consideration. But for buyers who don't have $100,000+ sitting around in a high-cost market like Southern California, waiting for 20% often means waiting indefinitely while prices keep rising. Running the numbers with a lender — comparing PMI cost versus buying sooner — often makes the case for moving forward with a smaller down payment.