How Much Do You Need for Your Down Payment?
You probably have a strategy in place as you begin your homebuying adventure, and you're working on saving for your purchase. But do you have any idea how much money you'll need for a down payment?
If you believe you must put down 20%, you may have established your target based on a common misunderstanding. According to Freddie Mac,
"The most damaging down payment myth—because it prevents the homebuying process from getting started—is the belief that a 20% down payment is required."
It's not usually necessary to put down 20% unless your loan type or lender requires it. The median down payment hasn't exceeded 20% since 2005, according to the National Association of Realtors' Profile of Home Buyers and Sellers. It may come as a surprise, but today's figure is merely 13%. It's much lower for first-time homeowners, who make a 7 percent down payment on average (see graph below):
How Does This Affect You?
While putting down 20% or more on a home has many advantages, the average buyer puts down far less. That's wonderful news for you since it implies you might be closer to realizing your dream of owning a home than you think.
There are various locations to go if you want to learn more about low down payment choices. For suitable purchasers, there are programs with down payments as little as 3.5 percent. There are other no-down-payment loans available, like as VA and USDA loans, for qualified candidates.
You must complete your studies in order to comprehend your possibilities. Sites like downpaymentresource.com provide information on down payment help programs if you're interested in learning more. Work with a real estate advisor from the beginning to learn what you might be eligible for in the homebuying process.
Remember: a 20% down payment isn’t always required. Let's connect to start the conversation and examine your down payment alternatives if you plan to buy a home this year.