Diablo Gazette July 2023
Saving for a Down Payment?
Here’s What You Need To Know If you are planning to buy your first home, then you are probably focused on saving for all the costs involved in such a big purchase. One of the expenses that may be at the top of your mind is your down payment. If you are intimidated by how much you need to save for that, it may be because you believe you must put 20% down. Maybe not.
The National Association of Realtors (NAR) notes: “One of the biggest misconceptions among housing consumers is what the typical down payment is and what amount is needed to enter homeownership.”
A recent Freddie Mac survey finds: “. . . nearly a third of prospective homebuyers think they need a down payment of 20% or more to buy a home. This myth remains one of the largest perceived barriers to achieving homeownership.”
Unless specified by your loan type or lender, it is typically not required to put 20% down. This means you could be closer to your homebuying dream than you realize.
According to NAR, the median down payment has not been over 20% since 2005. In fact, the median down payment for all homebuyers today is only 14%. And it is even lower for first-time homebuyers at just 6%. What does this mean for you? It means you may not need to save as much as you originally thought.
Options That Can Help You Toward Your Goal - According to www.DownPaymentResource.com there are 304 down payment assistance programs in California, and the majority are intended to help with down payments.
Many people believe there is only assistance available for first-time homebuyers, but for repeat buyers 38% of the programs are for folks that have owned a home in the last three years. Additionally, for any buyer who qualifies, there are FHA loans with down payments as low as 3.5%; and, options like VA loans and USDA loans with no down payment requirements for qualified applicants.
If you are interested in learning more about down payment assistance programs, partner with a trusted lender to learn what you qualify for on your homebuying journey. I have a few I recommend that have high success rates due to their knowledge of the California programs.
