First-Time Homebuyer Guide: Down Payment, PMI & Tips

2025-01-20 • Calcely

Buying your first home can be overwhelming. This guide covers the core items: down payment, PMI, pre-approval, and what to expect in closing costs.

Down payment options

While 20% avoids PMI, many programs allow 3%–5% down for qualified buyers. Smaller down payments mean PMI and higher monthly payments.

What is PMI?

Private Mortgage Insurance (PMI) protects the lender if you default. It's usually required for down payments under 20% and can be removed once you reach 20% equity.

Use our mortgage calculator to include PMI and see true monthly costs.