Do You Have Enough Money Saved For A Down Payment? Plus FREE Homebuyers Guide!
Today I want to talk about down payments and the different options you have when it comes to buying a house.
One of the biggest misconceptions for first time home buyers is how much you'll need to save for a down payment. Contrary to popular belief, you don't always have to put 20% down to buy a house. So here's how it breaks down. A recent survey by Point2Homes mentions that 74% of millennials say that they're interested in purchasing a home over the next 12 months. The study notes that 88% say they have significantly less savings than the average national down payment amount, which is $62,600. Thankfully, this is not the amount that every buyer needs for a down payment in the United States. There's many different options available, especially for first time home buyers. And that amount can also be significantly less depending on the purchase price of the house that you choose. According to the National Association of Realtors and the latest numbers available show that the median existing home price for all housing types in August was $310,600. They also indicate that in 2019, the median down payment was 12% for all buyers, 6% for first time buyers and 16% for repeat buyers. This means that if a qualified first time buyer purchases a home at today's median price of $310,600 with a 6% down payment, the down payment only amounts to $18,636, which is nowhere near the $62,000 price point.
Knowing that there's also programs like FHA where the down payment can be as little as 3.5% of the purchase price, for a first time buyer that upfront cost could be significantly less and as little as $10,871 for the same home. There's also other programs like USDA and loans for veterans that wave down payment requirements. The Point2Homes study also shares how much millennials have indicated that they've saved for a down payment, and as we can see in the graph, 39% have already saved enough for a down payment on a median priced home and another 47% are close to reaching that goal depending on the purchase price of the home.
Unfortunately, the lack of knowledge about the home buying process is keeping many motivated first-time buyers on the sidelines. And that's why it's important to contact a local real estate agent to understand the requirements in your area if you're looking to buy a home. A trusted agent and your lender can guide you through the process and help you to get started.
Be careful not to let big myths about home buying, keep you and your family out of the housing market. Let's connect to help you better understand and plan for your options today. And if you'd like a copy of my free home buyers guide, just click the link down below to make sure you get a copy, and I'll be happy to get that to you ASAP!