I hear this statement from first-time homebuyers quite often: “I’d love to be a house, but I’ll never save up the 20% down payment that the bank requires.”
Hold on.
Honestly, I thought we had debunked this myth a long time ago, but this type of thinking is still prevalent in the real estate world. So, I want to repeat: The need for a 20% down payment is a common misconception of homebuyers.
In a survey, Freddie Mac discovered that almost a third of homebuyers still believe that they need a 20% down payment. “This myth is one of the largest barriers to achieving
homeownership!”
Let’s examine the truth.
Some loan types may require a 20% down payment, but this is not a typical expectation. In fact, there are loan program types, like FHA loans, with payments as low as 3.5% and there are options with VA and USDA Loans that require no down payment at all for qualified applicants.
This is good news! You could potentially be closer to buying a home than you realized!
There are also down payment assistance programs that may help bridge the gap for some homebuyers. Many of these programs do not require that applicants be first-time homebuyers. Talk to a lender you trust to determine the best options for your personal situation.
THE TAKEAWAY
Saving for a down payment is an important first step in the home buying process. But be sure to learn all you can about loans and programs that may be available to you.
Homeownership may be closer than you think.
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