Are you dreaming of owning your first home but feeling overwhelmed by the prospect of saving for a hefty down payment? You’re not alone. Many potential homebuyers believe they need to save up 20% of the home’s price to put down, but the truth is far more manageable than you might think.
Contrary to popular belief, a 20% down payment is not always necessary. In fact, for most homebuyers, it’s much lower than that. According to The Mortgage Reports, while putting down 20% to avoid mortgage insurance is a wise move if feasible, it’s not always required. The reality is that most people opt for a much lower down payment.
The National Association of Realtors (NAR) confirms this, reporting that the median down payment hasn’t exceeded 20% since 2005. Today, the median down payment for all homebuyers is just 15%, and for first-time homebuyers, it’s even lower at 8%.
This means you may not need to save as much as you originally thought to achieve your homeownership dreams. Additionally, there are numerous resources available to help you toward your down payment goal. Down Payment Resource reports that there are over 2,000 homebuyer assistance programs in the U.S., many of which are designed to assist with down payments.
Furthermore, various loan options offer low down payment requirements. For example, FHA loans allow down payments as low as 3.5%, while VA and USDA loans have no down payment requirements for qualified applicants.
To find out what assistance programs and loan options you qualify for, consult with your loan officer or broker. They can provide insights into local grants and loan programs that may be available to you.
Don’t let the misconception that you need a 20% down payment hold you back from pursuing homeownership. Waiting to save up 20% could potentially cost you more in the long run, as home prices are expected to continue appreciating. By leveraging available resources and buying now, you can benefit from future price growth and start building equity sooner.
In conclusion, remember that you don’t always need a 20% down payment to buy a home. If you’re ready to make a move, don’t hesitate to reach out and start the conversation about your homebuying goals. At The Freund Group, we’re here to help you navigate the path to homeownership with confidence.