The Number That Stops Dreams: How Much Money Do You Actually Need to Buy a Home in the East Valley?

Let’s talk about the conversation I have every week. It’s with a young couple, a single professional, or a new family, and they’re scrolling through homes in Gilbert or Chandler on their phone. They have that look in their eyes—a mix of hope and discouragement. And then they say it: “We’d love to buy, but we’re years away from saving up a 20% down payment.”

My heart sinks a little every time I hear it. Not because they’re wrong to be concerned about saving, but because they’re operating on an outdated myth that is holding their dream hostage. The 20% down payment figure has become so ingrained in our culture that it feels like an absolute, unshakeable rule. For so many, it makes the goal of homeownership feel completely unattainable, like a finish line that keeps moving further away.

I’ve seen this number paralyze people. It stops them from making the call to a lender, from asking questions, from even allowing themselves to dream about what’s possible. As someone who sees families build their entire future through the equity in their homes, I need to be direct with you: the 20% down payment is the biggest, most persistent, and most damaging myth in real estate today. So, let’s pull back the curtain. Let’s talk real numbers, real loan programs, and the actual, on-the-ground costs of buying a home in our beautiful East Valley in 2026.

The reality is so much more hopeful than you’ve been led to believe.

Quick Answer Summary

Do I really need a 20% down payment to buy a home in the East Valley? No. This is the most common misconception. While a 20% down payment helps you avoid Private Mortgage Insurance (PMI), it is not a requirement for most loans.

In 2026, numerous loan programs allow for much smaller down payments, making homeownership far more accessible.

What is the minimum down payment I can make? For most buyers, the minimum down payment is between 3% and 5% of the purchase price. An FHA loan allows for as little as 3.5% down. Some conventional loans offer options for 3% or 5% down. And for eligible veterans and service members, a VA loan requires 0% down.

What other costs are there besides the down payment? In addition to your down payment, you will have closing costs, which typically range from 2% to 3% of the purchase price. These cover fees for the appraisal, title insurance, loan origination. However, in the current East Valley market, it is very common to negotiate for the seller to pay for some or all of these costs, significantly reducing the cash you need to close.

The 20% Myth: Where It Comes From and Why It’s Not the Whole Story

The 20% down payment rule became standard for one primary reason: to avoid

Private Mortgage Insurance (PMI). PMI is an insurance policy that protects the lender, not you, in case you are unable to make your mortgage payments. From a lender’s perspective, a borrower putting down less than 20% is a higher risk, so they require this insurance to mitigate that risk. PMI is typically paid monthly as part of your mortgage payment.

While avoiding a few hundred dollars a month in PMI is a great financial goal, it should not be the barrier that keeps you renting for five more years.

Think about it this way: the rent you pay offers a 0% return on your investment. The money is gone forever. Even with PMI, a mortgage payment allows you to start building equity and benefiting from property appreciation. You can also request to have PMI removed once you reach 20% equity in your home, or you can refinance out of it when the time is right.

Your Real Down Payment Options: The Programs That Make Homeownership Possible Let’s look at the actual loan programs that most first-time and even move-up buyers are using in the East Valley today.

These are the tools that turn renters into homeowners.

• FHA Loans (The 3.5% Solution): This is one of the most popular programs for a reason. Backed by the Federal Housing Administration, FHA loans are designed to help buyers who may not have massive savings. They allow for adown payment of just 3.5% and are more flexible on credit score requirements. For a $500,000 home in Gilbert, a 3.5% down payment is $17,500. That’s a world of difference from the $100,000 you thought you needed.

• Conventional 97 Loan (The 3% Solution): Many people think “conventional loan” automatically means 20% down, but that’s not true. Fannie Mae and Freddie Mac back conventional loan programs that allow for as little as 3% down for qualified buyers. These often have slightly higher credit score and income requirements than FHA loans, but they are a fantastic option.

• VA Loans (The 0% Benefit for Service): If you are a veteran, active-duty service member, or eligible surviving spouse, this is the best home loan program in America. Period. VA loans require zero money down and have some of the most favorable terms available. It is an incredible benefit earned through service, and it is one of the most powerful wealth-building tools available to military families.

The Other Cost: Understanding and Minimizing Closing Costs This is the second piece of the financial puzzle. Your down payment is not the only cash you’ll need. Closing costs are the fees associated with finalizing the mortgage and transferring the property title. They typically run between 2-3% of the purchase price and cover things like:

• Loan Origination Fees: What the lender charges for creating the loan.

• Appraisal Fee: The cost to have a licensed appraiser determine the home’s value.

• Title Insurance: Protects you and the lender from any future claims on the property’s title.

• Prepaid Expenses: Things like your first year of homeowner’s insurance and property taxes.

Here’s the good news: in today’s more balanced East Valley market, we can often negotiate for the seller to contribute to, or even completely cover, your closing costs.

This is called a seller concession. A few years ago, this was nearly impossible.

Today, it’s a common and powerful negotiating tool that can save you thousands of dollars in out-of-pocket expenses.

Putting It All Together: A Real-World East Valley Example Let’s make this tangible. Imagine you’ve found a home you love in Chandler for $500,000 and you’re using an FHA loan.

• Down Payment (3.5%): $17,500

• Estimated Closing Costs (2.5%): $12,500

• Total Initial Cash Needed: $30,000

Now, let’s see what happens when we negotiate. In this market, it’s realistic to ask the seller for a concession to cover your closing costs. Let’s say we successfully negotiate for the seller to pay all $12,500 of your closing costs.

• Your New Total Cash Needed: $17,500

Suddenly, the path to owning that $500,000 home looks completely different. It’s not a six-figure savings goal anymore. It’s a number that feels real, achievable, and within reach much sooner than you thought.

If you’ve been stuck on the 20% myth, I hope this has opened your eyes to what’s truly possible. The first step isn’t saving for ten years; it’s having a five-minute conversation with a great lender who can tell you your real numbers. If you’re ready to find out what your path to homeownership looks like, let’s talk. I can connect you with the best local lenders who can help you take that first, crucial step.