Saving for a Down Payment? Here’s What You Need To Know.

<article class="post-720542 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-720542"><span class="entry-date">June 19, 2023</span><div class="entry-header center-block text-center"><h1 class="entry-title">Saving for a Down Payment? Here’s What You Need To Know.</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=Saving+for+a+Down+Payment%3F+Here%E2%80%99s+What+You+Need+To+Know.&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fsaving-for-a-down-payment-heres-what-you-need-to-know%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
<div class="fb-share-button display-inline-block" data-href="https://gilliggroup.com/blog/saving-for-a-down-payment-heres-what-you-need-to-know/" data-layout="" data-size=""><a class="facebook solid fb-xfbml-parse-ignore" data-tracking="Post,Social Post Link Clicked,Twitter" href="https://www.facebook.com/sharer/sharer.php?u=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fsaving-for-a-down-payment-heres-what-you-need-to-know%2F&amp;src=sdkpreparse" target="_blank"><span class="force-hidden">Facebook</span></a></div>
<a class="pinterest solid display-inline-block" count-layout="horizontal" href="https://pinterest.com/pin/create/link/?url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fsaving-for-a-down-payment-heres-what-you-need-to-know%2F&amp;description=Saving+for+a+Down+Payment%3F+Here%E2%80%99s+What+You+Need+To+Know." target="_blank"><span class="force-hidden">Pinterest</span></a>
<a class="linkedin solid display-inline-block" href="https://www.linkedin.com/shareArticle?mini=true&amp;url=https://gilliggroup.com/blog/saving-for-a-down-payment-heres-what-you-need-to-know/?shareSlug%3Dsaving-for-a-down-payment-heres-what-you-need-to-know" target="_blank"><span class="force-hidden">LinkedIn</span></a>
<a class="email dashicons dashicons-email solid display-inline-block" href="mailto:?subject=From gilliggroup.com: Saving for a Down Payment? Here’s What You Need To Know.&amp;body=Saving for a Down Payment? Here’s What You Need To Know.%0D%0Dhttps://gilliggroup.com/blog/saving-for-a-down-payment-heres-what-you-need-to-know/" target="_blank"><span class="force-hidden">Email</span></a>
</div></div><div class="post-tax post-category"><span></span><a href="../category/realtor-blog/index.html" rel="tag">Realtor Blog</a></div><div class="post-tax post-post_tag"></div></div><div class="entry-content"><div><img alt="Saving for a Down Payment? Here’s What You Need To Know. Simplifying The Market" decoding="async" loading="lazy" src="https://media.agentaprd.com/sites/222/20230619-saving-for-a-down-payment-heres-what-you-should-know.webp" style="display: block; margin-bottom: 5px; clear: both; max-width: 100%;" width="358"/>
<p>If you’re planning to buy your <a href="https://www.simplifyingthemarket.com/2023/05/31/keys-to-success-for-first-time-homebuyers/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank">first home</a>, then you’re probably focused on saving for all the costs involved in such a big purchase. One of the expenses that may be at the top of your mind is your down payment. If you’re intimidated by how much you need to save for that, it may be because you believe you must put 20% down. That doesn’t necessarily have to be the case. As the <em>National Association of Realtors</em> (NAR) <a href="https://www.nar.realtor/blogs/economists-outlook/tackling-home-financing-and-down-payment-misconceptions" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank">notes</a>:</p>
<blockquote><p>“<em>One of the biggest misconceptions among housing consumers is what the typical down payment is and what amount is needed to enter homeownership</em>.”</p></blockquote>
<p>And a recent <em>Freddie Mac </em>survey <a href="https://myhome.freddiemac.com/buying/down-payments-and-pmi" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank">finds</a>:</p>
<blockquote><p>“<em>. . . nearly a third of prospective homebuyers think they need a down payment of 20% or more to buy a home. This myth remains one of the largest perceived barriers to achieving homeownership</em>.”</p></blockquote>
<p><strong>Here’s the good news. Unless specified by your loan type or lender, it’s typically not required to put 20% down. This means you could be closer to your homebuying dream than you realize.</strong></p>
<p>According to NAR, the <a href="https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank">median down payment</a> hasn’t been over 20% since 2005. In fact, the median down payment for all homebuyers today is only 14%. And it’s even lower for first-time homebuyers at just 6% (<em>see graph below</em>):</p>
<p><a href="https://www.simplifyingthemarket.com/content/images/20230615/20230619-todays-median-down-payment-is-less-than-20-percent.png?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank"><img decoding="async" src="https://files.keepingcurrentmatters.com/content/images/20230615/20230619-todays-median-down-payment-is-less-than-20-percent.png"/></a></p>
<p>What does this mean for you? It means you may not need to save as much as you originally thought.</p>
<h4><strong>Learn About Options That Can Help You Toward Your Goal</strong></h4>
<p>And it’s not just how much you need for your down payment that isn’t clear. There are also misconceptions about down payment assistance programs. For starters, many people believe there’s only assistance available for first-time homebuyers. While first-time buyers have many options to explore, repeat buyers have some, too.</p>
<p>According to <a href="https://downpaymentresource.com/" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank"><em>Down Payment Resource</em></a>,<strong> </strong>there are over 2,000 homebuyer assistance programs in the U.S., and the majority are intended to help with down payments. That same resource goes on to say:</p>
<blockquote><p>“<em>You don’t have to be a first-time buyer. Over 38% of all programs are for repeat homebuyers who have owned a home in the last 3 years.</em>”</p></blockquote>
<p>Plus, there are even loan types, like <a href="https://www.hud.gov/buying/loans" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank">FHA loans</a> with down payments as low as<span style="color: red;"> </span><a href="https://www.benefits.gov/benefit/504" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank">3.5%</a> as well as options like <a href="https://www.va.gov/housing-assistance/home-loans/loan-types/" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank">VA loans</a> and <a href="https://www.rd.usda.gov/programs-services/single-family-housing-programs/single-family-housing-guaranteed-loan-program" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank">USDA loans</a> with no down payment requirements for qualified applicants.</p>
<p>If you’re interested in learning more about down payment assistance programs, information is available through sites like <a href="https://downpaymentresource.com/" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank"><em>Down Payment Resource</em></a>. Then, partner with a trusted lender to learn what you qualify for on your <a href="https://www.simplifyingthemarket.com/2023/06/01/the-true-value-of-homeownership/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank">homebuying</a> journey.</p>
<h3>Bottom Line</h3>
<p>Remember, a 20% down payment isn’t always required. If you want to purchase a home this year, reach out to a trusted real estate professional to start the conversation about your homebuying goals.</p>
</div>
</div></article>