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The down payment doesn't necessarily always have to be 20%


There are people who are hesitant to make a down payment because the money they've saved doesn't amount to 20% of the home's purchase price. However, it's not necessary to make a down payment of exactly 20%. So, what percentage do other people typically put down?

According to research, more than one-third of all buyers are mistakenly under the impression that a down payment of 20% or more is required, leading them to save up money accordingly.

This is simply not true.

In fact, since 2005, there has never been a time when the median down payment reached 20%. Most mortgage loans do not require a down payment of 20% or more.

As you can see in the graph below, the median down payment for buyers nowadays is 14%. Especially for first-time homebuyers, the median down payment is only 6%.

Of course, there are many advantages to making a down payment of 20% or more. However, I believe that waiting and saving up until you reach that threshold, potentially missing out on rising home values, is rather inefficient.

Therefore, instead of solely relying on non-experts' advice to save up 20% of the money, it's better to consult with mortgage professionals or real estate agents for a more strategic approach. In particular, by visiting the Down Payment Resource website mentioned earlier, you may find programs that assist with down payments.

According to the website, 38% of the programs they introduce can be applied to buyers who are not first-time homebuyers.

Thus, as I always emphasize, I recommend consulting with experts and strategically planning your approach to real estate purchases.

I will continue to provide helpful information in future posts.

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