How Much Do You Need for Your Down Payment?

<article class="post-138488 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-138488"><span class="entry-date">January 3, 2022</span><div class="entry-header center-block text-center"><h1 class="entry-title">How Much Do You Need for Your Down Payment?</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=How+Much+Do+You+Need+for+Your+Down+Payment%3F&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fhow-much-do-you-need-for-your-down-payment%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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<p><img alt="How Much Do You Need for Your Down Payment? | Simplifying The Market" class="webfeedsFeaturedVisual wp-post-image" decoding="async" link_thumbnail="" loading="lazy" sizes="auto, (max-width: 549px) 100vw, 549px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/12/21164238/20220103-KCM-Share-549×300.jpg" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/12/21164238/20220103-KCM-Share-549×300.jpg 549w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/12/21164238/20220103-KCM-Share.jpg 750w" style="display: block; margin-bottom: 5px; clear:both;max-width: 100%;" width="358"/></p>
<p>As you set out on your homebuying journey, you likely have a plan in place, and you’re working on saving for your purchase. But do you know how much you actually need for your down payment?<span id="more-45761"></span></p>
<p>If you think you have to put 20% down, you may have set your goal based on a common misconception. <em>Freddie Mac</em> <a href="https://sf.freddiemac.com/articles/insights/down-payments-helping-future-borrowers-bridge-the-awareness-gap">says</a>:</p>
<blockquote>
<p><em>“The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.”</em></p>
</blockquote>
<p>Unless specified by your loan type or lender, <strong>it’s typically not required to put 20% down</strong>. According to the <a href="https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers"><em>Profile of Home Buyers and Sellers</em></a> from the <em>National Association of Realtors</em> (NAR), the median down payment hasn’t been over 20% since 2005. It may sound surprising, but today, that number is only 13%. And it’s even lower for <a href="https://www.simplifyingthemarket.com/2021/12/14/advice-for-first-generation-homebuyers/?a=712984-fa409495d5d70154d03a25e81e9540e2">first-time</a> homebuyers, <strong>whose median down payment is only 7%</strong> <em>(see graph below)</em>:</p>
<p><a href="https://files.simplifyingthemarket.com/wp-content/uploads/2021/12/21164240/20220103-MEM-Eng-1.png"><img alt="How Much Do You Need for Your Down Payment? | Simplifying The Market" class="aligncenter wp-image-45766" decoding="async" height="488" loading="lazy" sizes="auto, (max-width: 650px) 100vw, 650px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/12/21164240/20220103-MEM-Eng-1.png" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/12/21164240/20220103-MEM-Eng-1.png 1000w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/12/21164240/20220103-MEM-Eng-1-400×300.png 400w" width="650"/></a></p>
<h4><strong>What Does This Mean for You?</strong></h4>
<p>While a down payment of 20% or more does have <a href="https://www.simplifyingthemarket.com/2021/12/22/the-perks-of-putting-20-down-on-a-home/?a=712984-fa409495d5d70154d03a25e81e9540e2">benefits</a>, the typical buyer is putting far less down. That’s good news for you because it means you could be closer to your <a href="https://www.simplifyingthemarket.com/2021/12/02/tips-for-single-homebuyers-how-to-make-your-dream-a-reality/?a=712984-fa409495d5d70154d03a25e81e9540e2">homebuying dream</a> than you realize.</p>
<p>If you’re interested in learning more about low down payment options, there are several places to go. There are programs for qualified buyers with down payments as low as 3.5%. There are also options like VA loans and USDA loans with no down payment requirements for qualified applicants.</p>
<p>To understand your options, you need to do your homework. If you’re interested in learning more about down payment assistance programs, information is available through sites like <a href="https://downpaymentresource.com/"><em>downpaymentresource.com</em></a>. Be sure to also work with a <a href="https://www.simplifyingthemarket.com/2021/11/26/reasons-to-hire-a-real-estate-professional-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2">real estate advisor</a> from the start to learn what you may qualify for in the <a href="https://www.simplifyingthemarket.com/2021/11/30/home-is-where-the-heart-is-more-than-ever-this-year/?a=712984-fa409495d5d70154d03a25e81e9540e2">homebuying</a> process.</p>
<h3><strong>Bottom Line</strong></h3>
<p>Remember: a 20% down payment isn’t always required. If you want to purchase a home this year, let’s connect to start the conversation and explore your down payment options.</p>
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