Did you know that almost 80% of first-time homebuyers qualify for down payment assistance, but only 13% take advantage of it? If you’re planning to buy a home, this is a gap worth closing—quickly (see graph below):
Here’s what you need to know to make the most of your down payment in today’s housing market.
Amplify Your Down Payment Potential
For first-time buyers, the key to success is leveraging all the resources available to help with your down payment. There are plenty of options that can help you reach your goal faster than you might expect.
For example, some loan programs allow you to buy a home with as little as 3% down—or even 0% if you’re a qualified borrower, such as a Veteran. Additionally, down payment assistance programs, like grants or other opportunities, can help reduce the upfront costs of purchasing a home.
If you’re curious about what’s available to you, connect with a trusted lender. By exploring these options, you might find ways to boost your down payment. A higher down payment can help lower your monthly mortgage payment and even reduce fees like private mortgage insurance. Don’t leave money on the table—take the time to see what assistance you might qualify for.
Don’t Let News Headlines About Down Payments Scare You
Another thing to keep in mind is not to let news about rising down payments intimidate you. According to a report from Redfin:
The typical down payment for U.S. homebuyers hit a record high of $67,500 in June, up 14.8% from $58,788 a year earlier . . . This was the 12th consecutive month the median down payment rose year over year.”
While this might sound daunting, it’s important to understand that rising averages don’t mean down payment requirements are increasing. What’s happening is that more buyers are choosing to put down larger amounts to help offset higher mortgage rates. Current homeowners leveraging their equity are also contributing to this trend. HousingWire explains:
. . . buyers are putting down a higher percentage of the purchase price to lower their monthly mortgage payment. And buyers also had more equity from their home sales, which gives them more cushion.”
Here’s a closer look at why this is happening:
1. A Bigger Down Payment Lowers Monthly Payments: With affordability challenges in today’s market, buyers who can afford larger down payments often do so to reduce their long-term housing costs.
2. Current Homeowners Have More Equity: Homeowners who purchased their properties years ago have seen substantial equity gains thanks to price appreciation. They’re using this equity to make larger down payments on their next homes, which isn’t always an option for first-time buyers.
Bottom Line
What’s the best step for you? Contact Linda Craft Team Realtors to explore your options. We can help you assess your current situation and find resources you might qualify for. Assistance is available—you just need to work with the right professional to take advantage of it.