Question 1

How much should I put down on a house?

Accepted Answer

20% is ideal because it avoids PMI, but many programs allow 3-5% down (conventional), 3.5% (FHA), or 0% (VA/USDA). A larger down payment means lower monthly payments and less interest over time.

Question 2

What is PMI and when does it go away?

Accepted Answer

Private Mortgage Insurance protects the lender when you put less than 20% down. It costs 0.5-1% of the loan annually. By law, PMI is automatically removed when your balance reaches 78% of the original value, and you can request removal at 80%.

Question 3

Is it better to put 20% down or invest the difference?

Accepted Answer

If you invest the difference at a higher return than your mortgage rate + PMI cost, investing wins mathematically. But the guaranteed savings from avoiding PMI and lower payments make 20% down the safer choice.

Question 4

Can I use gifted money for a down payment?

Accepted Answer

Yes, most loan programs accept gift funds for down payments. You'll need a gift letter and documentation of the transfer. FHA, VA, and USDA loans are particularly gift-friendly.

Down Payment Calculator

The 20% Rule

Down Payment Calculator

Related Calculators

The 20% Rule