If you're thinking of buying a house in the United States this year, you may be wondering how much money you need to put down. Many people may think that it is 20% of the loan to secure a mortgage in the United States, usually foreigners need to put down more than 30%, although it is possible to get lines of credit for foreigners with 25% of down payment.

While there are several lower down payment options available for qualified buyers who don't want to pay 20%, it's important to understand how a higher down payment can have great benefits too.

The truth is that there are many available programs that allow you to reduce the down payment by up to 3.5% if you are a US tax resident, which can be a great benefit for those who want to buy a home sooner rather than later. Those who have served the United States as military personnel, police officers or firefighters may also qualify for a Veterans Affairs (VA) Special Loan and may not need a down payment. These programs have actually reduced the savings time for many potential buyers, allowing them to start accumulating family wealth sooner.

Here are four reasons why putting at least 20% as a down payment is a good plan, if you can afford it.

4. You won't have to pay Private Mortgage Insurance (PMI)

What is PMI? According to Freddie Mac:

"PMI is an insurance policy that protects the lender if you can't pay your mortgage. It is a monthly fee, included in the mortgage payment, required for all conforming conventional loans with down payments of less than 20%. Once you have amortized at least 20% of your home, you can cancel your PMI and remove this expense from your mortgage payment."

As mentioned earlier, when you pay less than 20% when buying a house, your lender will see that your loan has more risk. PMI helps them recover their investment in you if you can't repay the loan. This insurance is not necessary if you can afford 20% or more.

Often, home sellers who want to move to a larger or more expensive home can use the equity they've gained from the sale of their home to invest 20% in their next home. With the equity that homeowners have today, it's a great opportunity to put those savings towards a down payment of 20% or more on a new home.

If you're looking to buy your first home, consider the benefits of a 20% down payment over a smaller down payment option.


If you're thinking of buying a house and you're already saving for the down payment, let's talk to see which line of financing best suits your long-term plans.

Any doubts?

Now that you understand the benefits of a larger down payment on your mortgage. We can help you understand the behavior of the real estate market and consider investing in vacation homes in Orlando. To make the most of all the tips we've given you and go even deeper, you can talk directly to our relationship agents. They are always happy to talk to you to answer any questions you may have about investing in Florida.

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