One of the biggest misconceptions for first-time homebuyers 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, especially if you take advantage of government-backed programs or incentives.
Are you eager to buy a home but aren’t sure if you have enough saved up for your down payment? You may have more options than you think!
What Every Buyer Should Know About Down Payments
According to a recent study, 74% of millennials say they’re interested in purchasing a home over the next 12 months—but 88% have significantly less saved up than the average national down payment amount, which is $62,600.
While this may seem discouraging, you don’t actually need to save that much to purchase a reasonably priced home in the Triangle. Let’s take a look at how buyers—especially first-timers—can lower their down payments.
The median down payment percentage is lower than you’d expect
While 20% is usually considered the norm for down payments, most buyers don’t pay that much upfront. In fact, the median down payment for all buyers in 2019 was just 12%, while first-timer buyers put down an average of just 6%.
Let’s put that into perspective. If a qualified first-time buyer purchases a home at today’s median price of $310,600 with a 6% down payment, they’d only be paying $18,636. That’s a lot less than $62,600!
There are many programs available to help finance your down payment
Federal and state governments offer a variety of down payment assistance programs for home buyers. Many first-timers use FHA loans, which are backed by HUD and require as little as 3.5% down. There are also other programs, like USDA loans and VA loans, that waive down payment requirements.
Here in North Carolina, you can also receive down payment assistance and tax credits through the NC Home Advantage Program, which is offered through the North Carolina Housing Finance Agency.
Bottom Line: You May Already Have Enough Saved to Buy a Home
According to a recent study by Point2Homes, 39% of millennials have already saved enough for a down payment on a median-priced home. Another 47% are close to reaching that goal, depending on the purchase price of the home.
If you’re putting off your home purchase because you haven’t saved enough for a down payment, you may want to take another look at your finances. You can also contact a local Raleigh agent to learn more about mortgages and the current market!
Make Your Move with Linda Craft & Team
If you need to sell your current home before you buy, we can certainly help with that, too!