From the RatesQ team · Sample question

Can I buy a home with 5% down?

This educational scenario and its sample explanations are not posts from real users.

I have about $22,000 saved and looking at homes in the $350-400k range. Is 5% down realistic for a first-time buyer with good credit (720 score) and steady income? What are the downsides compared to 20%?

Quick Summary

  1. Down-payment requirements depend on the loan program and eligibility.
  2. The down payment and closing costs are separate parts of cash to close.
  3. Review any mortgage insurance and its cancellation terms in the written offer.

Sample explanations

From the RatesQ team

Yes, 5% down is totally doable with a 720 score. You'll pay PMI but at 720 it shouldn't be brutal — probably in the $80-150/month range depending on the lender. The bigger issue is making sure you have enough left after the down payment for closing costs (plan for 2-4% of purchase price on top of the down payment) and some cash reserve.

From the RatesQ team

At 720 credit with 5% down on a $375k home, you're looking at a $356k loan. PMI at your credit tier will likely run $90-130/month and drops off once you reach 20% equity. One thing worth checking: some lenders offer lender-paid PMI (LPMI) where they absorb the PMI in exchange for a slightly higher rate — can simplify the payment and might make sense if you expect to refinance before you'd otherwise hit 20% anyway. Get quotes both ways. Your savings level looks a bit tight depending on the purchase price — make sure you have closing costs plus 2+ months of mortgage payments in reserves after closing.

From the RatesQ team

Also check for first-time buyer programs in your state — some offer down payment assistance or lower PMI. Varies a lot by state and income level but worth a 10-minute Google before you decide.