Is a 20% Down Payment Really Necessary To Purchase a Home?
For over half of those surveyed, the ability to afford a down payment is the biggest hurdle keeping people from buying a home.
That may be because those individuals assume a 20% down payment is necessary. While putting more money down if you’re able can benefit buyers, putting 20% down is not mandatory. As Freddie Mac puts it:
“The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.”
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’s average down payment is only 12%!That number is even lower for first-time homebuyers, whose average down payment is only 7%.
What does this mean for you?
You might think saving for a down payment is tough, but there are programs out there to help. You can get loans with no required minimums and low monthly payments that will make your life easier in the long run! Be sure to work with a real estate advisor from the start to learn what you may qualify for in the homebuying process.
Lamont "Ben" Orr - The Orr Team eXp Realty 720-425-3365