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Do You Really Need a 20% Down Payment to Buy a Home?

Key takeaways:

  • Most buyersā€”especially first-timersā€”think they need a 20% down payment to purchase a home.
  • Believe it or not, a majority of today’s buyers put down significantly less than 20%!
  • Want to know if homeownership is within your reach? Contact Linda Craft & Team at 919-235-0007 to start your real estate journey!

No, You Don’t Need a 20% Down Payment to Buyā€”Here’s Why

Today, thereā€™s still a common myth that you have to come up with 20% of a home’s total sale price for your down payment. However, this couldn’t be further from the truth. Homeownership is still possible with a low down paymentā€”here’s how!

Today’s median down payment is less than 20%

Piggy bank on paperwork when calculating down payment

For decades, 20% was considered the “standard” amount for a downpayment. To put that into perspective, a 20% down payment on a $250,000 house equals out to about $50,000. If saving that much money sounds daunting, potential homebuyers might give up on the dream of homeownership before they even beginā€”but they donā€™t have to.

According to recent data from the NAR, the median down paymentĀ hasnā€™t actually been over 20% since 2005. In fact, most first-time buyers put down as little as 7%, while repeat buyers put down around 16%.

Loan options make financing your home easier than ever

House with down payment percentages

Another common myth among buyers is that most lenders won’t approve a mortgage without a sizable down payment. There are actually a number of loan programs tailored to first-time, lower income, or niche buyers, many of which require little to no down payment.

The federal government backs a variety of loansā€”including USDA, FHA, and VA mortgagesā€”for qualified applicants. And here in North Carolina, the state government offers mortgages and down payment assistance programs through the NC Housing Finance Agency.

Bottom Line: You Have More Options Than You Think!

Couple searching for down payments on a tablet

Even if you don’t have that much saved up for a home, it’s still possible to achieve your real estate goals. Potential homebuyers (both repeat and first-timers) likely donā€™t need to put down 20% of a home’s purchase price, but they do need to do theirĀ homework.

Take a look at all of your optionsā€”particularly government mortgages and down payment assistance programsā€”to determine the right path to homeownership. And if you ever have any questions, reach out to a local real estate agent!

Make Your Next Move with Linda Craft & Team

Thinking about buying a home in the Triangle? Linda Craft & Team has more than 350 years of combined real estate experience, and we know a thing or two about Raleigh’s unique market. Give us a call at 919-235-0007 for more informationā€”we look forward to working with you!

Need to sell before you buy? Request a free home valuation to see how much equity is in your home!

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