I might add, if you are really worried and it’s your first home, why not just do FHA? Yes, you will have to pay PMI, but if you are so concerned about losing your downpayment, then it might be worth paying the extra monthly.
I mean, to give you a scenario (not to scare you, but worst case) property values lose more than 20%. You may end up not only losing 20%, but paying PMI anyway. Been there, done that when I had my place in Carmel Valley way back in the day.
For the bulls, to give you a positive side, if you went FHA and the market improved and the value goes up, you can try to get rid of the PMI, even though you didn’t put 20% down of your own money.
