Do You Have Enough Money Saved for a Down Payment?
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. Here’s how it breaks down.
There are many different options available, especially for first-time homebuyers (millennial or not). That amount can also be significantly less, depending on the purchase price of the house and the type of mortgage such as an FHA, VA or USDA loan.
The traditional 20% down payment can scare buyers off. If a qualified first-time buyer purchases a home at today’s median price, $310,600, with a 6% down payment, in reality, the down payment only amounts to $18,636.
Knowing there are programs like FHA where the down payment can be as low as 3.5% of the purchase price for a first-time buyer, that up-front cost could be significantly less – as little as $10,871 for the same home noted above. There are also other programs like USDA (United States Department of Agriculture for rural areas) and loans for Veterans that waive down payment requirements.
Unfortunately, the lack of knowledge about the homebuying process is keeping many motivated first-time buyers on the sidelines. That’s why it’s important to complete a home buyer education course and work with a local real estate professional to understand the requirements in your local area.
Be careful not to let big myths about homebuying keep you and your family out of the housing market. Visit us at hfamiami.com/homebuyers for information on our first time home buyers program and generous down payment and closing cost assistance options. You will be glad you did.