20% – 20% – 20%… Do you think you need to save up a hefty 20% for a down payment? Well I’ve got GREAT news! Stay tuned as we look into the truth about down payments and unveil strategies to make homeownership more accessible.
Hey! I’m Anita L Williamson, Associate Broker with James River Realty Group.
The great news is that unless specified by your loan type or lender, it’s typically not required to put 20% down. That means you could be closer to your homebuying dream than you realize.
How To Avoid Mortgage?
The Mortgage Reports says: “Although putting down 20% to avoid mortgage insurance is wise if affordable, it’s a myth that this is always necessary. Most people opt for a much lower down payment.”
According to the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. In fact, for all homebuyers today it’s only 15%. And it’s even lower for first-time homebuyers at just 8%.
So you may not need to save as much as you originally thought.
Homebuyer Assistance Program
According to Down Payment Resource, there are also over 2,000 homebuyer assistance programs in the U.S., and many of them are intended to help with down payments.
Plus, there are loan options that can help too. For example, FHA loans offer down payments as low as 3.5%, while VA and USDA loans have no down payment requirements for qualified applicants.
With so many resources available to help with your down payment, the best way to find what you qualify for is by consulting with your loan officer. They know about local grants and loan programs that may help you out.
The Misconceptions
Don’t let the misconception that you have to have 20% saved up hold you back. If you’re ready to become a homeowner, work with the professionals to find resources that can help you make your dreams a reality. If you put your plans on hold until you’ve saved up 20%, it may cost you in the long run. According to U.S. Bank: “. . . there are plenty of reasons why it might not be possible. For some, waiting to save up 20% for a down payment may “cost” too much time. While you’re saving for your down payment and paying rent, the price of your future home may go up.”
Home prices are expected to keep appreciating over the next 5 years – meaning your future home will likely go up in price the longer you wait. If you’re able to use these resources to buy now, that future price growth will help you build equity, rather than cost you more.
Keep in mind that you don’t always need a 20% down payment to buy a home. If you’re looking to make a move this year, reach out to me today so we can discuss your home ownership goals.
I’m Anita L Williamson Helping You Establish Roots In Central Virginia.
