As you set out on your homebuying journey, you likely have a plan in place, and youre working on saving for your purchase. But do you know how much you actually need for your down payment?
If you think you have to put 20% down, you may have set your goal based on a common misconception.Freddie Macsays:
The most damaging down payment mythsince it stops the homebuying process before it can startis the belief that 20% is necessary.
Unless specified by your loan type or lender,its typically not required to put 20% down. According to theProfile of Home Buyers and Sellersfrom theNational Association of Realtors(NAR), the median down payment hasnt been over 20% since 2005. It may sound surprising, but today, that number is only 13%. And its even lower forfirst-timehomebuyers,whose median down payment is only 7%(see graph below):
What Does This Mean for You?
While a down payment of 20% or more does havebenefits, the typical buyer is putting far less down. Thats good news for you because it means you could be closer to yourhomebuying dreamthan you realize.
If youre interested in learning more about low down payment options, there are several places to go. There are programs for qualified buyers with down payments as low as 3.5%. There are also options like VA loans and USDA loans with no down payment requirements for qualified applicants.
To understand your options, you need to do your homework. If youre interested in learning more about down payment assistance programs, information is available through sites likedownpaymentresource.com. Be sure to also work with areal estate advisorfrom the start to learn what you may qualify for in thehomebuyingprocess.
Bottom Line
Remember: a 20% down payment isnt always required. If you want to purchase a home this year, lets connect to start the conversation and explore your down payment options.
