What are the best ways to save for a down payment? Here’s what you need to know.
You’re probably saving up for the costs of buying your first home. Your down payment may be one of the first expenses on your mind. You may be intimidated by the amount you have to save because you think you must put down 20%. This doesn’t have to be true. The National Association of Realtors (NAR), for example, notes that “one of the biggest misconceptions of housing consumers is the amount of down payment needed to become a homeowner.” And a recent Freddie Mac study finds:”. . . Nearly a third (33%) of prospective homebuyers believe they need to pay a 20% down payment or more in order to purchase a home. This myth remains one of the largest perceived barriers to achieving homeownership.”Here’s the good news. It’s not necessary to put down 20% unless your loan type or lender specifies otherwise. According to NAR, median down payments haven’t exceeded 20% since 2005. The median down payment today for all homebuyers is only 14%. What does this mean to you? It could mean that you don’t need to save as many dollars as you thought. Learn about options that can help you reach your goal. There are some misconceptions about programs that provide assistance with down payment. Many people think that only first-time buyers are eligible for assistance. According to Down Payment Resource there are over 2,000 homebuyer programs in the U.S. and most of them are designed to help with the down payment. The same resource says: “You don’t need to be a new buyer.” Over 38% are for repeat homebuyers that have owned a house in the past 3 years. Partner with a trusted mortgage lender to find out what you are eligible for. Contact a trusted real-estate professional to begin the conversation.
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