Recently, I spoke with a family looking for their first home in San Antonio.

They were concerned about the question, "If I can't make a 20% down payment, how long do I have to pay PMI?"

Surprisingly, many people have this misconception. However, this is not the case with a typical Conventional Loan.

For example, if you put down 10% on a home and take out a conventional loan, you may initially have to pay PMI, or private mortgage insurance.

However, as you pay down the loan and build enough equity in the home, you can eliminate PMI under certain conditions.

So, it's not entirely true that you shouldn't buy a home until you save up 20%.

San Antonio is an interesting city for comparing these loan options.

Currently, home prices vary depending on the data and collection methods, but they are generally centered around the high $200,000s to low $300,000s.

Let's consider a $300,000 home.

A 20% down payment would be $60,000. For a first-time homebuyer, $60,000 is not a small amount.

Therefore, some people choose to put down only 5% or 10% and pay PMI initially, then eliminate it later.

If you're a military member, the situation changes completely.

San Antonio is a prominent military city with Joint Base San Antonio located here. With so many active-duty service members and veterans, VA Loans are a familiar option in this area.

If eligible, VA loans allow you to purchase a home with no down payment and without typical PMI.

However, there may be a VA Funding Fee, which varies based on service conditions, whether it's your first use, and how much you put down, so you shouldn't assume that "VA loans are always free." Some eligible individuals may have the Funding Fee waived.

For those lacking credit scores or cash for their first home, FHA loans are also frequently compared.

Generally, if you have a credit score of 580 or higher, you can proceed with a 3.5% down payment.

For a $300,000 home, that would be about $10,500, which is a significant difference in required cash compared to a 20% down payment.

However, FHA loans come with MIP, or mortgage insurance premium.

Especially if you put down less than 10%, the MIP typically continues to be paid annually throughout the loan term. This can be easily confused with PMI from conventional loans.

In summary, if you have good credit and some down payment, it's worth comparing Conventional Loans first.

If you lack a large sum of money or have credit issues that make conventional loans difficult, FHA could be an alternative. If you qualify due to military service, VA loans are definitely worth considering.

However, when buying a home in San Antonio, you shouldn't only look at mortgage rates.

Texas has no state income tax, but property tax burdens are significant, and recently, homeowners insurance has also become an important cost.

If you're in a neighborhood with an HOA, that needs to be added to calculate your actual monthly housing costs.

Particularly in desirable areas like Stone Oak or Alamo Heights, the price differences can be substantial even within San Antonio.

So, I wouldn't recommend relying solely on the statement, "The bank said they would lend me this much," and spending your entire budget.

The amount the bank can lend and what you can comfortably pay each month are two different things.

Before you start looking at homes, it's best to compare the loans available to you among Conventional, FHA, and VA, and get pre-approved.

Ultimately, what's important when buying your first home is not just making a 20% down payment.

It's about understanding how PMI can be eliminated, how long you will pay FHA's MIP, and whether you qualify for VA.

If you're preparing to buy your first home in San Antonio, it's much more beneficial to study this first rather than just choosing a house.