You Don't Need 20% Down to Buy a Home: Exploring Your Options

Feb 27

If you're a first-time homebuyer, saving for the down payment can feel overwhelming. You may have heard that you NEED to put down 20% of the home's price, but that's not always the case. In fact, most people don't put down 20%.

According to The Mortgage Reports, “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.”

The key takeaway?

You might not need to save as much as you thought to achieve your homeownership goal. There are numerous resources available to help you get there.

Did you know that there are over 2,000 homebuyer assistance programs in the US, many of which are designed to assist with down payments? Additionally, various loan options can help make homeownership more accessible.

For instance, FHA loans require as little as 3.5% down, while VA and USDA loans offer no down payment requirements for eligible applicants.

By exploring these resources and options, you may be closer to owning your dream home than you think!

With numerous resources available to assist with your down payment, consulting with a Lender is the best way to determine your eligibility. They are knowledgeable about local grants and loan programs that can help.

Don't let the misconception of needing 20% down hold you back. By working with professionals, you can find resources to make your homeownership dream a reality. Delaying your plans to save 20% may actually cost you more in the long run, as home prices are expected to continue appreciating over the next 5 years. Utilizing available resources to buy now can help you build equity as prices rise, rather than paying more later.

Bottom Line:

Remember, a 20% down payment isn't always necessary to achieve homeownership. If you're looking to make a move this year, connect with a trusted real estate professional (LIKE ME!) to explore your options and start the conversation about your homebuying goals. They can guide you through the process and help you find the best solution for your needs.