The Case for Putting 20% Down on Your Next Murrieta Home

If you’re planning to buy your next home in Murrieta, you’ve probably heard the old rule about saving 20% for your down payment.

The truth is, you usually don’t have to. Plenty of loan options allow qualified buyers to put down much less. But a lot of repeat buyers are choosing to put 20% down anyway.

So, why are they if they don’t have to?

Two reasons: They know a bigger down payment can pay off, and after years in their current home, they may have built up enough equity to make it possible.

Repeat Buyers Put More Money Down

According to the National Association of Realtors (NAR), the typical repeat buyer puts down 23% when they purchase a home (see graph below):



That’s more than double the 10% they may have put down as a first-time buyer. So, how do they manage it? Their equity.

When you’ve owned a home for a while, two things tend to happen. First, you pay down your mortgage. Second, your home may increase in value. The difference between what your home is worth and what you still owe on your mortgage is your equity. And the longer you’ve owned your home, the more that equity can potentially grow.

When you sell, that equity can become cash you can put toward your next home. In fact, NAR data shows most repeat buyers put their existing home equity toward their next down payment (see chart below):



First-time buyers don’t have that springboard yet, and that’s completely normal. But if you already own a home in Murrieta or the surrounding area, you may be sitting on more buying power than you realize.

And if putting 20% down is finally possible, it may be worth considering what that could do for your next move.

4 Perks of Putting 20% or More Down

As Redfin explains, putting more money down can pay off in several ways.

1. A Smaller Monthly Payment

The more you put down, the less you have to borrow. And with mortgage rates where they are today, reducing the amount you need to finance can make a meaningful difference in your monthly payment.

If a higher mortgage payment is one of the things making you hesitate about moving, a larger down payment could help make your next Murrieta home more affordable.

2. Paying Less Interest

A smaller loan can also mean paying less interest over the life of your mortgage.

For example, if you put 20% down, you're financing the remaining 80% of the purchase price. Put 5% down, and you're financing 95%.

That larger loan can mean paying significantly more interest over time, so putting more down upfront may save you money in the long run.

3. No Private Mortgage Insurance (PMI)

When you put less than 20% down on a conventional loan, lenders typically require private mortgage insurance, or PMI.

With 20% down, PMI generally isn't required, which can eliminate that additional monthly expense.

Of course, loan requirements vary, so it’s important to talk with a trusted lender about your specific situation.

4. A Stronger Offer

A larger down payment can also make your offer more attractive to a seller.

From the seller’s perspective, a buyer bringing more money to the table may appear financially stronger and potentially less likely to run into financing issues. In a competitive market, that can give your offer another advantage.

And even in a more balanced market like the one we're seeing today, having a strong offer can help when you're trying to secure the right home.

Your Current Home Could Be the Key

If you're thinking about moving up in Murrieta, don't overlook what your current home could contribute to the equation.

You may have purchased your home years ago with a much smaller down payment. Since then, you've been paying down your mortgage while your home may have appreciated in value.

That equity could now become a powerful tool.

It could help you put 20% down on your next home, reduce the amount you need to borrow, or simply give you more flexibility when deciding how much cash you want to put toward your purchase.

The important thing is to know your numbers before you start shopping.

A current estimate of your home's value, your remaining mortgage balance, and your potential selling costs can give you a much clearer picture of what you may actually have available for your next purchase.

Bottom Line

No, you don't need to put 20% down to buy your next home. But you may want to.

If you've owned your home for several years, the equity you've built could make a larger down payment more achievable than you think. That could mean a lower monthly payment, less interest, no PMI on a conventional loan, and a stronger offer when you're ready to make your move.

If you're thinking about buying your next home in Murrieta and want to know what your current home could contribute to that purchase, let's connect. We can help you understand your home's potential value and how your equity could help you take the next step.