First-time home buyers can easily get confused about how much they need to save for a down payment on a home. Is 20% required? How about 10%? But aren't FHA loans requiring only 3.5% down payments?
Understand 20% Isn’t Always the Typical Down Payment
Freddie Mac explains:
“. . . nearly a third of prospective homebuyers think they need a down payment of 20% or more to buy a home. This myth remains one of the largest perceived barriers to achieving homeownership.”
Unless your loan type or lender requires a 20% down payment, you could be closer to your homebuying dream than you realize. According to the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. In fact, the median down payment today is only 14%. And it’s even lower for first-time homebuyers at just 6% (see graph below):
Learn About Options That Can Help You Toward Your Goal
If saving for a down payment is a challenge, you can get help. Lenders can show you options on how much you need to raise to get closer to your down payment goal. According to latest Homeownership Program Index from 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.
Plus there are even loan types, like FHA loans, with down payments as low as 3.5%, as well as options like VA loans and USDA loans with no down payment requirements for qualified applicants.
f 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.
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