Did you know, you don’t need a 20% down payment to buy a home in today’s market? If you didn’t, you’re not alone.
According to a recent survey by Genworth, 28% of participants, mortgage industry professionals, said that “consumers still mistakenly believe that a 20 percent down payment is a requirement for purchasing a home.” And 41% of these professionals surveyed “believe that even among prospective borrowers who understand a 20 percent down payment is not mandatory to purchase a home, the belief persists that it would be difficult to get into a house with less.”
Additionally, from a recent study by Ipsos on behalf of Zillow, of the 10,000 Americans surveyed, 66% reported “affording the down payment” as the number one barrier to owning a home. 61% of participants reported that they rent a home because they “can’t afford to buy a house.”
With the extreme confusion and misinformation surrounding a down payment and the home buying process, let’s clear a few things up.
How much do homebuyers actually need?
The minimum amount needed for your down payment depends on the home loan program you choose for your transaction. Here is the breakdown of each program and the minimum amount necessary for the down payment.
Conventional: 3%, 5%, 10% (the minimum amount depends on the Conventional program you use)
How can you figure out what works best for you?
Every person’s situation is unique and each home loan transaction is different. The important first step to obtain accurate information about your down payment is to schedule a meeting with a Summit Funding loan officer. At this meeting you will go over your personal financial situation and discover what loan program is ideal for you and your family. Your loan officer can also introduce a variety of down payment assistance programs to you to help you purchase a home.
Don’t let this common myth hold you back from buying the home of your dreams, get started with Summit Funding today!