“Unless specified by your loan type or lender, it’s typically not required to put 20% down.”
If you’re getting ready to buy your first home, you’re likely focused on saving up for everything that purchase involves. One cost that’s likely top of mind is your down payment. But don’t let a common misconception about how much you need to save make the process harder than it could be.
Understand 20% Isn’t Always the Typical Down Payment
Freddie Mac explains:
“. . . nearly a third of prospective homebuyers think they need a down payment of 20% or more to buy a home. This myth remains one of the largest perceived barriers to achieving homeownership.”
Unless specified by your loan type or lender, it’s typically not required to put 20% down. This means you could be closer to your homebuying dream than you realize. According to the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. In fact, the median down payment today is only 14%. And it’s even lower for first-time homebuyers at just 6% (see graph below):
Learn About Options That Can Help You Toward Your Goal
If saving for a down payment still feels like a challenge, know that there’s help available. A real estate professional and trusted lender can show you options that could help you get closer to your down payment goal. According to latest Homeownership Program Index from Down Payment Resource, there are over 2,000 homebuyer assistance programs in the U.S., and the majority are intended to help with down payments.
Plus there are even loan types, like FHA loans, with down payments as low as 3.5%, as well as options like VA loans and USDA loans with no down payment requirements for qualified applicants.
To understand your options, be sure to do your homework. If you’re interested in learning more about down payment assistance programs, information is available through sites like Down Payment Resource. Then, partner with a trusted lender to learn what you qualify for on your homebuying journey.
Remember, a 20% down payment isn’t always required. If you want to purchase a home this year, let’s connect. You’ll also want to make sure you have a trusted lender so you can explore your down payment options.
To view original article, visit Keeping Current Matters.
What’s Ahead for Home Prices in 2023
The decision to purchase a home is best made when you do it knowing all the facts and have an expert on your side. Call today to speak to one of our expert real estate agents.
What Buyer Activity Tells Us About the Housing Market
January’s home showings are a positive sign that buyers are getting back out there.
An Expert Gives You Clarity in Today’s Housing Market
The right agent can help you understand what’s happening at the national and local levels.
Leverage Your Equity When You Sell Your House
Record levels of home equity provide security for millions of families, and minimize the chance of another housing market crash.
4 Tips for Making Your Best Offer on a Home
When putting together an offer, your trusted real estate advisor will help you think through what levers to pull.
Could a Multigenerational Home Be the Right Fit for You?
Multi-generational home buying is a way for families to often buy a home that may have been previously out of reach.