Down payment is not necessarily 20%
Some people are hesitant to buy a house because the money they saved to make a down payment is less than 20% of the house price they want to buy. But, down payments do not necessarily have to be 20%. So, what percentage of the down payment do other people make?
According to research, more than one-third of all buyers raise their money with the misinformation that a downpayment must be 20% or more.
This is absolutely not true. In fact, the median down payment hasn't been 20% since 2005. Most mortgage loans do not require a down payment of more than 20%.
As you can see in the graph below, the median down payment for buyers these days is 14%. Especially for first home buyers, the median is only 6%.
Of course, there are many advantages to having a down payment of 20% or higher. However, I think it is more inefficient to delay buying a house for the sake of those advantages and not be able to keep up with rising house prices.
Therefore, rather than waiting to collect 20% of the money from non-experts, it is better to approach it more strategically through consultation with mortgage experts or realtors. More specifically, if you go to the Down Payment Resource site mentioned earlier, you may find a program that helps with down payments. According to the site, 38% of the programs they introduce are programs that can be applied even if you are not a first home buyer.
Therefore, (as I always say), I recommend that you consult with an expert and approach your real estate purchase with a more strategic plan.
See you in the next article with more helpful content.