Do I really need a 20% down payment?

Our question for today is something that I talked about this time last year but I think it’s worth bringing up again for the benefit of buyers and that is “do I need twenty percent down payment to buy a home” and the answer is no. That’s probably the single biggest misconception that we see especially among first-time homebuyers. I can’t tell you how many aspiring homeowners I’ve talked to over the years who are saving for a down payment and then they roll their eyes and say but it’s going to take me years to get to twenty percent. The fact is that is just a myth you don’t need that at all.

The average down payment across the country for first-time homebuyers last year was six percent. The average down payment for folks who had a home to sell and were buying second or third or fourth homes was only 14 percent so even people who have equity to bring to the table aren’t paying 20 percent down in a lot of cases. There are many programs out there especially if you’re within certain income limits where you can buy a home for zero percent down. You can get grants which you never have to pay back to help with your closing costs and you can ask the seller to pay some of those other closing costs and wrap them into the price. There are many options and so I would encourage you as a first step if you don’t own a home but would like to, ask your friends and ask your realtor what local lenders they’ve had good experience with who’s worked really hard for them and then go talk to those people and see what your options are. I think you will be amazed by the possibilities that are within your reach.

If you’ve got a question for me or a coffee you’d like to see us try here please send that to questions@klinemay.com. As always if you’d like to keep up with what’s going on in our market, click the link below and that’ll take you to a display of the newest listings that have hit our Market in the last two weeks. Thanks for joining us we’ll see you again next time.