If you want to buy your first home, you’re probably trying to save up for all the costs that come with it. Your down payment may be one of the first costs that come to mind. If the amount you need to save scares you, it could be because you think you must put 20% down. That doesn’t have to be the case, though. As pointed out by the National Association of Realtors (NAR),
“One of the biggest misunderstandings among people who want to buy a home is what a typical down payment is and how much is needed.”
And a new poll by Freddie Mac shows:
“Almost a third of people who want to buy a home think they need a 20% down payment or more. This myth is still seen as one of the biggest reasons why people don’t buy their own homes.
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. 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.
Learn About Options That Can Help You Toward Your Goal
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, reach out to a trusted real estate professional to start the conversation about your home-buying goals.