If youre planning to buy yourfirst home, then youre probably focused on saving for all the costs involved in such a big purchase. One of the expenses that may be at the top of your mind is your down payment. If youre intimidated by how much you need to save for that, it may be because you believe you must put 20% down. That doesnt necessarily have to be the case. As theNational Association of Realtors(NAR)notes:
One of the biggest misconceptions among housing consumers is what the typical down payment is and what amount is needed to enter homeownership.
And a recentFreddie Macsurveyfinds:
. . . 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.
Heres the good news. Unless specified by your loan type or lender, its typically not required to put 20% down. This means you could be closer to your homebuying dream than you realize.
According to NAR, themedian down paymenthasnt been over 20% since 2005. In fact, the median down payment for all homebuyers today is only 14%. And its even lower for first-time homebuyers at just 6% (see graph below):
What does this mean for you? It means you may not need to save as much as you originally thought.
Learn About Options That Can Help You Toward Your Goal
And its not just how much you need for your down payment that isnt clear. There are also misconceptions about down payment assistance programs. For starters, many people believe theres only assistance available for first-time homebuyers. While first-time buyers have many options to explore, repeat buyers have some, too.
According toDown Payment Resource,there are over 2,000 homebuyer assistance programs in the U.S., and the majority are intended to help with down payments. That same resource goes on to say:
You dont have to be a first-time buyer. Over 38% of all programs are for repeat homebuyers who have owned a home in the last 3 years.
Plus, there are even loan types, likeFHA loanswith down payments as low as3.5%as well as options likeVA loansandUSDA loanswith no down payment requirements for qualified applicants.
If youre interested in learning more about down payment assistance programs, information is available through sites likeDown Payment Resource. Then, partner with a trusted lender to learn what you qualify for on yourhomebuyingjourney.
Bottom Line
Remember, a 20% down payment isnt always required. If you want to purchase a home this year, reach out to a trusted real estate professional to start the conversation about your homebuying goals.
I can help guide you in your home selling or home buying process. Please call me, Marie McLaughlin 727-858-7569.
Source:https://www.keepingcurrentmatters.com/2023/06/19/saving-for-a-down-payment-heres-what-you-need-to-know/
