PMI is brutal, but it does change a down payment from 20% to 3.5%. >A home costs ~25% of the down payment on the day you buy it. I think this is related to th

PMI is brutal, but it does change a down payment from 20% to 3.5%. >A home costs ~25% of the down payment on the day you buy it. I think this is related to the conventional wisdom that you shouldn't buy a house unless you expect to live there for ~7 years (I think, I can't remember if that number is right). I think they're referring to the costs associated with the sale (pulling permits, mortgage costs, real estate agent, etc.). So on a $500,000 house, a traditional down payment would be $100,000, making closing costs $25,000. Sounds like it's within an order of magnitude.