As you set out on your homebuying journey, you likely have a plan in place, and you’re working on saving for your purchase. But do you know how much you actually need for your down payment?
If you think you have to put 20% down, you may have set your goal based on a common misconception. Freddie Mac says:
“The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.”
Unless specified by your loan type or lender, it’s typically not required to put 20% down. According to the Profile of Home Buyers and Sellers from the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. It may sound surprising, but today, that number is only 13%. And it’s even lower for first-time homebuyers, whose median down payment is only 7% (see graph below):
While a down payment of 20% or more does have benefits, the typical buyer is putting far less down. That’s good news for you because it means you could be closer to your homebuying dream than you realize.
If you’re interested in learning more about low down payment options, there are several places to go. There are programs for qualified buyers with down payments as low as 3.5%. There are also options like VA loans and USDA loans with no down payment requirements for qualified applicants.
To understand your options, you need to do your homework. If you’re interested in learning more about down payment assistance programs, information is available through sites like downpaymentresource.com. Be sure to also work with a real estate advisor from the start to learn what you may qualify for in the homebuying process.
Remember: a 20% down payment isn’t always required. If you want to purchase a home this year, let’s connect to start the conversation and explore your down payment options.
Fontaine Family – The Real Estate Leader is a highly skilled real estate team of licensed professionals dedicated to focusing on the client. Fontaine was awarded 2019 Maine Family Business of the Year, voted Best Real Estate Company in the Greater Lewiston/Auburn Area and Greater Portland Area, recognized by Real Trends as a 2019 America’s Top 250 Real Estate Team and published in the Wall Street Journal in the Top 250 Real Estate Professionals ranking in the top ½ of 1% of Realtors outperforming 99.9% of the nation’s Realtors.
The Fontaine Family Team serves 8 counties – Androscoggin, Cumberland, York, Sagadahoc, Oxford, Kennebec, Franklin and Somerset – in two locations, 336 Center Street in Auburn and 432 US Route One in Scarborough. For more information visit BrendaFontaine.com or call (207)784-3800 or (207)289-3830.