Saving for a Down Payment? Here’s What You Should Know.
Saving for a down payment is probably at the top of your mind when you start the home-buying process. However, you can still have concerns regarding the procedure, such as how much to save and how to get started.
If you identify with that, your down payment might be more affordable than you initially imagined. This is why.
The 20% Down Payment Myth
You might have set your target based on a widespread misunderstanding if you think you need to put 20% down when buying a house. Freddie Mac clarifies:
“. . . 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.”
It's normally not necessary to put 20% down unless your loan type or lender specifically states otherwise. The median down payment hasn't exceeded 20% since 2005, according to the National Association of Realtors' (NAR) most recent Profile of Home Buyers and Sellers. There are also lending options like FHA loans, which only require 3.5% down, as well as VA loans and USDA loans, which don't require any down payment from qualified borrowers.
This is wonderful news for you since it suggests that you might be closer than you think to realizing your ambition of owning a home. Consult a reliable lender for further details.
Programs for Down Payment Assistance Can Change the Game
Another method that can enable you to come closer to your down payment target can be demonstrated to you by an expert. Over 2,000 homebuyer assistance programs exist in the United States, the bulk of which are designed to assist with down payments, according to the most recent Homeownership Program Index from downpaymentresource.com.
An article from recently illustrates why these kinds of initiatives are beneficial:
“These resources can immediately build your home buying power and help you take action sooner than you thought possible.”
You don't always have to be a first-time buyer to be eligible for these programs, in case you were wondering. According to a downpaymentresource.com article:
“It is a common misconception that homebuyer assistance is only available to first-time homebuyers, however, 38% of homebuyer assistance programs in Q1 2022 did not have a first-time homebuyer requirement.”
You may also be eligible for programs that are dependent on your geographic location and occupation.
To sum up
The first stage in the home-buying process is to save for your down payment. Let’s connect today and make sure you have a trusted lender to help explore your options.