It is a common misconception that home buyers must contribute 20% to their down payment. A recent survey by Lending Tree asked what’s stopping consumers from buying a house. The biggest obstacle to purchasing a home is affordability for more than half of those surveyed.
This could be because these individuals believe a 20% down payment will suffice. Although it is possible to put more down if you are able to benefit buyers, a 20% down payment is not required. As Freddie Mac puts it:
You might feel overwhelmed by the prospect of saving so much money that you are ready to give up on your dream of homeownership. But you don’t need to. The Profile of Sellers and Home Buyers is a report from the National Association of Realtors. It shows that the median down payment has not been higher than 20% since 2005. Although it may seem surprising, today’s median down payment has remained below 20% since 2005. First-time homebuyers have an average down payment of 7%.
What does Mean for You?
It’s important to remember that you don’t need to pay 20% down if you are a potential homebuyer. While saving any down payment amount can seem daunting, qualified buyers have programs that allow them to buy a home with as little as 3.5% down. For qualified applicants, there are VA loans and USDA loans that don’t require a down payment.
You need to research your options in order to fully understand them. 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 home buying process.
Bottom Line
Do not let the myth about the 20% down payment stop you from buying a home. Reach out to trusted real estate professionals if you are interested in purchasing a home in the coming year.
This post was written by Josh Dotoli! Josh is the owner of Josh Dotoli Group which is a laser-focused real estate team at Compass comprised of industry experts selling Fort Lauderdale’s best neighborhoods. This dynamic group is one of the top-selling real estate teams in South Florida with over $94 million in sales in the past 12 months alone. Looking for victoria park Fort Lauderdale homes for sale, we are the real estate team for you!