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

Key takeaways:

  • Most buyers—especially first-timers—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 Buy—Here’s Why

Today, there’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 payment—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 begin—but they don’t have to.

According to recent data from the NAR, the median down payment hasn’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 loans—including USDA, FHA, and VA mortgages—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 don’t need to put down 20% of a home’s purchase price, but they do need to do their homework.

Take a look at all of your options—particularly government mortgages and down payment assistance programs—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 information—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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