If you're planning to buy your first home, then you're probably focused on saving for all the costs involved in such a big purchase. One of the expenses that may be at the top of your mind is your down payment. If you’re intimidated by how much you need to save for that, it may be because you believe you must put 20% down. That doesn’t necessarily have to be the case. As the National Association of Realtors (NAR) notes:
“One of the biggest misconceptions among housing consumers is what the typical down payment is and what amount is needed to enter homeownership.”
And a recent Freddie Mac survey finds:
“. . . 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.”
Here’s the good news. Unless specified by your loan type or lender, it’s typically not required to put 20% down. This means you could be closer to your homebuying dream than you realize.
According to NAR, the median down payment hasn’t been over 20% since 2005. In fact, the median down payment for all homebuyers today is only 14%. And it’s even lower for first-time homebuyers at just 6% (see graph below):
What does this mean for you? It means you may not need to save as much as you originally thought.
And it’s not just how much you need for your down payment that isn’t clear. There are also misconceptions about down payment assistance programs. For starters, many people believe there’s only assistance available for first-time homebuyers. While first-time buyers have many options to explore, repeat buyers have some, too.
According to Down Payment Resource, there are over 2,000 homebuyer assistance programs in the U.S., and the majority are intended to help with down payments. That same resource goes on to say:
“You don’t have to be a first-time buyer. Over 38% of all programs are for repeat homebuyers who have owned a home in the last 3 years.”
If you’re interested in learning more about down payment assistance programs, information is available through sites like Down Payment Resource. Then, partner with a trusted lender to learn what you qualify for on your homebuying journey.
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 about your homebuying goals.
In today's competitive real estate market, facing multiple offers has become increasingly common, especially in sought-after neighborhoods. As a homebuyer, navigating …
If you’re looking to buy a home, the recent downward trend in mortgage rates is good news because it helps with affordability. But there’s another way this benefits yo…
When searching for a new home, many factors come into play, and one of the most crucial considerations for families is the quality of local schools and the school dist…
hile securing a mortgage is a significant achievement, it's important to remember that the journey doesn't end there
I often witness the magic that happens when homebuyers choose a house that may not be perfect at first glance but has the potential to become the home they've always …
As the air fills with the festive spirit, the towns of Maplewood, South Orange, and Montclair come alive with a colorful array of cultural celebrations in the month of…
Tired of wrapping socks and scarves every year? Why not treat yourself to the ultimate holiday gift—a shiny new home!
Essex County, New Jersey, comes alive during the December holidays, offering an array of enchanting activities and events that capture the spirit of the season.
Some individuals contemplate dipping into their 401(k) retirement savings as a means to secure a down payment. While this approach offers immediate financial relief, i…
Want to stay one step ahead of the market? Sign up to be on Dyanna's VIP mailing list to receive exclusive listings, real estate news and a lot more.