Did you know nearly 80% of first-time homebuyers qualify for down payment assistance, but only 13% take advantage of it? If you're looking to buy a home, closing this gap is crucial—and fast (see graph below):
Here's how you can maximize your down payment opportunities in today’s housing market.
Maximize Your Down Payment Potential
For first-time buyers, leveraging all available resources is the key to success. There are numerous programs designed to help you reach your homeownership goal faster than you might think.
Some loans, for example, require as little as 3% down, and for certain qualified borrowers, like Veterans, it can be 0%. Additionally, various grants and assistance programs can help cover the upfront cost of your down payment.
If you're serious about exploring these options, connecting with a trusted lender is essential. Failing to research what's available could mean leaving money on the table and missing out on your chance to buy a home. These programs can significantly boost your down payment, which in turn could lower your monthly mortgage payment and reduce costs like private mortgage insurance.
Don’t Be Intimidated by Rising Down Payment Headlines
You may have seen news about rising down payments. A report from Redfin states:
"The typical down payment for U.S. homebuyers hit a record high of $67,500 in June, up 14.8% from $58,788 a year earlier... This was the 12th consecutive month the median down payment rose year over year."
However, this shouldn't deter you. The rising average doesn’t mean down payment *requirements* are going up. Instead, buyers are choosing to put more down to counteract higher mortgage rates. Many current homeowners are also tapping into their home equity to increase their down payment on their next home. As HousingWire explains:
“...buyers are putting down a higher percentage of the purchase price to lower their monthly mortgage payment. And buyers also had more equity from their home sales, which gives them more cushion.”
Let's break down why this is happening:
1. A larger down payment reduces monthly payments**. With housing affordability being a challenge, many buyers are choosing to make bigger down payments to lower their future housing costs.
2. Existing homeowners have substantial equity**. If someone bought their home several years ago, they’ve likely gained significant value due to appreciation. This allows them to put down more when purchasing their next home, a luxury first-time buyers may not have.
The best move is to speak with a trusted lender to explore your options. They’ll help you understand where you stand and how to access the assistance you qualify for. Don’t miss out on the support that’s available—work with a pro to make the most of it.
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