One of the most common things I hear from buyers in Waco is:

“We’re waiting until we have 20% down.”

Sometimes that’s a great plan. But a lot of times, it’s based on a misunderstanding.

Do you actually need 20% down?

No. In most cases, you don’t.

There are several loan programs that allow:

  • 3% to 5% down for conventional loans

  • 3.5% down for FHA loans

  • 0% down for VA and USDA loans (if you qualify)

The right option depends on your credit, your income, and your long-term plans.

Why people think they need 20%

The 20% number comes from one main thing: avoiding PMI (private mortgage insurance). PMI isn’t “bad,” but it is an extra monthly cost. Some buyers prefer to avoid it. Others decide it’s worth paying in order to buy sooner.

The real question isn’t “How much can I put down?”

The better question is:

“What’s the smartest way to use my cash?”

In many cases, buyers are better off:

  • Keeping some cash in reserves

  • Not draining savings completely

  • Leaving room for moving costs, furniture, or repairs

What this looks like in Waco

In the Waco and Midway ISD area, many first-time and move-up buyers are putting down somewhere between 3% and 10%, not 20%. Some do more. Some do less. The key is matching the strategy to your situation.

When a bigger down payment does make sense

  • If you’re trying to keep your payment as low as possible

  • If you’re buying a higher-priced home

  • If you’re using sale proceeds from another house

  • If you’re close to 20% anyway

Bottom line

You probably don’t need as much down as you think. The right number is the one that fits your finances, your comfort level, and your plans.

A good lender and a good local agent should be helping you model different scenarios—not just pushing one number.