What down payment do I need to buy my first home?

You’ve probably heard you need to put 20% down on a home, right? And it’s true, that used to always be the rule. Nowadays, there are a few more options out there.

• Conventional loan: You can put as little as 5% down as long as you pay a fancy little thing called PMI (private mortgage insurance).
• FHA loan: You can put as little as 3.5% down with something called Upfront Mortgage Insurance (UFMI) and a monthly insurance premium (MIP) – usually rolled into your loan principal or APR.
• VA loan: You might be able to put nothing down! The good old government will pick up the tab for your PMI, though you’ll likely need to pay a VA funding fee.

If you’re wondering what the extra fees are for, they are to offset the costs of insuring the loan in case you can’t make your payments. And, in the case of FHA and VA loans, you’re splitting the bill with U.S. taxpayers (like U!).