As you set out on your homebuying journey, you likely have a plan
in place, and you’re 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 myth—since it stops the homebuying process before it can
start—is the belief that 20% is necessary.”
Unless specified by your loan type or lender, it’s typically not required to put 20% down. According to the Profile of Home Buyers and Sellers from the National Association of Realtors
(NAR), the median down payment hasn’t been over 20% since 2005. It may
sound surprising, but today, that number is only 13%. And it’s even
lower for first-time homebuyers, 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 have benefits, the typical buyer is putting far less down. That’s good news for you because it means you could be closer to your homebuying dream than you realize.
If you’re 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
To understand your options, you need to do your homework. If you’re
interested in learning more about down payment assistance programs,
information is available through sites like downpaymentresource.com. Be sure to also work with a real estate advisor from the start to learn what you may qualify for in the homebuying process.
Remember: a 20% down payment isn’t always required. If you want to
purchase a home this year, let’s connect to start the conversation and
explore your down payment options.