A report from the National Association of Realtors talks about the myths of down payments. It’s interesting to understand that down payment requirements for buying a home might be lower than you realize:
- Conventional loans for first-time homebuyers can be as little as 3%.
- If you aren’t a first-time homebuyer, then it can be 5%.
- FHA Loans are 3.5% down.
- VA Loans are 0% down.
Additionally, there is down-payment assistance programs that can help.
Do You Need Money for a Down Payment?
The truth is that in a lot of cases, you don’t need any money for a down payment. Interestingly, 2/3rds of the potential first-time homebuyers that responded to the National Association of Realtors survey said that the down payment is their biggest impediment to buying.
Other Myths About Down Payments
Other myths that were in that report:
- More than 45% of potential homebuyers said that they believed you need at least 20% or more to buy. (Which is not accurate)
- Only 11% of respondents said that they knew you could do 5% or less for a down payment.
For mortgage and real estate professionals, we need to understand that 90% of our first-time home buyers think that they need more than 5% down. That’s not what is real in the industry. It’s important that we break this myth to make it possible for people to buy their first homes.
If the down payment is standing in the way of you buying a house right now, then you need to talk to someone in real estate and look at the mortgage side to see the possibilities. Huge down payments don’t have to be a big impediment to buying your first house.
Reach out if you need more information or would like to learn more about the financing options. My team here at Franklin Loan Center is always here to help!