Saving for a Down Payment? Here's What You Should Know
If you're in the process of saving for your first home, it's natural to focus on the financial aspects of such a significant purchase. One aspect that may be causing concern is the down payment. The common misconception is that you need to put down 20% of the home's value, which can feel daunting.
This myth continues to be one of the major perceived obstacles to achieving homeownership. But here's the good news: Unless your loan type or lender specifies otherwise, a 20% down payment is not typically required. This means you may be closer to realizing your dream of homeownership than you think.
According to the NAR, the median down payment hasn't exceeded 20% since 2005. What does this mean for you? It means you may not need to save as much as you initially believed.
Explore the Various Options Available to Help You Reach Your Goal
It's not just the amount you need for your down payment that might be unclear to you. There are also misconceptions surrounding down payment assistance programs. Many people mistakenly believe that assistance is only available for first-time homebuyers. While first-time buyers have numerous options to consider, repeat buyers have opportunities as well.
According to Down Payment Resource, there are over 2,000 homebuyer assistance programs in the U.S., and the majority of them are designed to aid with down payments. The same resource points out:
"You don't have to be a first-time buyer. Over 38% of all programs are available to repeat homebuyers who have owned a home in the last 3 years."
In addition, there are loan types such as FHA loans with down payments as low as 3.5%, as well as options like VA loans and USDA loans that have no down payment requirements for eligible applicants.
If you're interested in learning more about down payment assistance programs, you can find information on websites like Down Payment Resource. It's also crucial to partner with a trusted lender who can guide you through the qualification process and determine what you're eligible for on your homebuying journey.
Remember, a 20% down payment is not always required. If you're planning to purchase a home this year, reach out to a reliable real estate professional to initiate a conversation about your homebuying goals.