How Much Do You Need For a Down Payment?
If you are planning on buying a home in the near future, you are probably focusing on saving as much as you can for all that is involved. One of the largest things at the top of your list is probably the down payment. While 20% is often the number thrown around, don’t let that scare you or prohibit you from making your move.
20% Is Not The Norm
According to Freddie Mac, “. . . 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 outlined by your lender or loan type, it is not required to put as much as 20% down on your new home. Per the National Association of Realtors (NAR), the median down payment has not been more than 20% in nearly 20 years. Today it is more like 14% and just 6% for first-time home buyers.
Know Your Options
If saving for a down payment still feels like it’s an uphill battle, know that there are options available. A real estate professional and a good lender can show you options that could help you get closer to your down payment goal. According to the latest Homeownership Program Index from Down Payment Resource, there are some 2,000 homebuyer assistance programs in the U.S., and most are intended to help with down payments. Additionally, there are loan types, like FHA loans, with down payments as low as 3.5%. Furthermore, there are options like VA loans and USDA loans with no down payment requirements for qualified applicants. To learn about all of your options, be sure to do your homework and partner with a trusted lender to learn what you qualify for in your home buying process. If you need help with where to start, please reach out to me today. I am happy to help!