The Truth About Down Payments

The Truth About Down Payments

If you’re planning to buy your first home, saving up for all the costs involved can feel daunting, especially when it comes to the down payment. That might be because you’ve heard you need to save 20% of the home’s price to put down. Well, that isn’t necessarily the case.

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.

As 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. In fact, 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% (see graph below):

a graph of a number of blue squares

The big takeaway? You may not need to save as much as you originally thought.

Learn About Resources That Can Help You Toward Your Goal

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 or broker. They know about local grants and loan programs that may help you out.

Don’t let the misconception that you have to have 20% saved up hold you back. If you’re ready to become a homeowner, lean on 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 actually 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.

Bottom Line

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, let’s connect to start the conversation about your homebuying goals.

front porch logo 600px
What To Know About Credit Scores Before Buying a Home

What To Know About Credit Scores Before Buying a Home

March 5, 2024

If you want to buy a home, you should know your credit score is a critical piece of the puzzle when it comes to qualifying for a mortgage. Read more…

Read More
The Truth About Down Payments

The Truth About Down Payments

February 27, 2024

Planning to buy your first home can be daunting, especially with the common belief that a 20% down payment is required, but that’s not always the case, Read more…

Read More
Strategic Tips for Buying Your First Home

Strategic Tips for Buying Your First Home

February 21, 2024

Navigating the excitement and challenges of buying your first home involves overcoming today’s market hurdles with three key tips to make your dream a reality.

Read More
Don't Miss Our Next Post
Subscribe Now
who you work with matters
version-1

Timo Rivetti has been serving his clients with a highly individualized service tailored to specific needs and requirements since 1998. Unparalleled knowledge and expertise in the region is invaluable when it comes to buying and selling real estate. Hiring an agent who knows the area inside out makes all the difference in a competitive market. Timo and his team of experienced professionals work with each and every client to find and secure the perfect property at the best price, with all of the required amenities in the right neighborhood. When it’s time to make a move, call Timo.

Timo photo collage-one

What My Clients Have To Say

maclir2001

Sold a Single Family home in Petaluma, CA.

Timo and his team guided me through the preparation for showing, including all inspections and document gathering, the actual showing, and help with negotiations so it was an easy and successful sale. It was a textbook-positive process.

His team gave me confidence and clarity through the whole experience. I recommend Rivetti Real Estate fully and happily.

Bravo and thank you, Timo!

Rebecca Brown

Bought a Townhouse home in Petaluma, CA.

Timo helped me buy my first house! (Still can't believe it!) I had a lot of questions, but he and his associate Renee were patient, professional, and fast in answering all of them. I found Timo through a friend and he could not have been more helpful and knowledgeable about the whole process for this noob home buyer. Highly recommend he and Renee and am so grateful to my friend for recommending him.

Kevin76298

Bought and sold a Multiple Occupancy home in Petaluma, CA.

I cannot say enough about my incredible experience with Timo and his assistant Renee. I am 22 years old and had a dream of buying a house in westside Petaluma. Most people would say that is impossible, well not if you have Timo on your side! Timo walked me through the process and made me feel so comfortable and confident throughout the whole process. Timo truly had my back and did the impossible and I now am a proud owner of a house in west side Petaluma. I will be using Timo for any purchase or sell I ever have, and I recommend you do the same. Thank you again Timo! Together we “Made History”

WHY NAVIGATE REAL ESTATE

Global Connections

Connected to over 460,000 Agents Worldwide in more than 160 countries you can be assured your home will be seen around the world.

Market Share

With over five decades of combined real estate experience, our team of agents and local experts bring an exceptional level of knowledge, teamwork, and diligence to help clients achieve their real estate goals.

$4.0+ Billion

Thousands of properties sold. Over $4.0+ billion in combined volume. You can trust your dealing with experts who will get it done

Happy Campers

Check our reviews. Our client's love us. We put in the work, and always put you first. Trust, integrity, honesty and passion!

If you live here already, you know how blessed we are. If you're considering living or investing here, you've probably experienced some of the area's extraordinary possibilities: country settings and small-town communities; enthralling agricultural beauty, and true farm to fork lifestyle, If Northern California is your real estate destination, you've arrived at the right spot. Whether you're looking to buy your first home - or to sell an estate - expect nothing less from us than a Meritage blend of real estate expertise, professional service, creativity, and a passion for achieving your goals.