The Truth About Down Payments: What You Need to Know
Oriana Suarez March 1, 2024
Buyers
Oriana Suarez March 1, 2024
Buyers
Planning to purchase your first home can be exciting yet overwhelming, especially considering the down payment. Many believe that saving 20% of the home’s price is a prerequisite for buying a home. However, this is not always the case.
As The Mortgage Reports says:
“Although putting down 20% to avoid mortgage insurance is wise if affordable, it’s a myth that this is always necessary. In fact, most people opt for a much lower down payment.”
According to the National Association of Realtors (NAR), the median down payment has not exceeded 20% since 2005. Presently, it stands at 15% for all homebuyers and a mere 8% for first-time homebuyers.
Exploring Down Payment Assistance:Fortunately, there are numerous resources available to assist with down payments. Down Payment Resource reports over 2,000 homebuyer assistance programs across the U.S., many aimed at aiding with down payments.
Additionally, various loan options offer flexibility. For instance, FHA loans require down payments as low as 3.5%, while VA and USDA loans have no down payment requirements for eligible applicants.
Consulting with a loan officer or broker is key to uncovering available resources. They possess insights into local grants and loan programs that could benefit you.
It’s essential not to let the misconception of needing a 20% down payment deter you. Waiting until you've saved 20% may prove costly in the long run. According to U.S. Bank, delaying your purchase could result in higher home prices over time, eroding potential equity.
With home prices expected to appreciate, leveraging available resources now can help you build equity and avoid paying more in the future.
So, remember that you don't necessarily need a large down payment to make your homeownership aspirations come true. It's all about understanding your alternatives and choosing the best path for you. If you are ready to start your journey, feel free to contact us to discuss your home-buying aspirations.
We're not just here to help; we're here to be your partners throughout the process, providing individualized counsel and support you can rely on. Let's transform your goal of owning a home into an exciting journey full of possibilities!
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