{"id":796,"date":"2017-02-15T00:00:00","date_gmt":"2017-02-15T00:00:00","guid":{"rendered":"https:\/\/amazingproperty.com.ng\/blog\/the-big-down-payment-myth\/"},"modified":"2021-12-20T10:29:56","modified_gmt":"2021-12-20T10:29:56","slug":"the-big-down-payment-myth","status":"publish","type":"post","link":"https:\/\/amazingproperty.com.ng\/blog\/the-big-down-payment-myth\/","title":{"rendered":"The Big Down Payment Myth"},"content":{"rendered":"

\"Down<\/a><\/p>\n

\n

<\/p>\n

Speaking of Down Payment, Having the spare capital to put 20 percent down on a home purchase is great, but it’s certainly not the norm.<\/h2>\n

Having the spare capital to put 20 percent down on a home purchase<\/a> is great, but it’s certainly not the norm. Still, many people think it is and that belief may be holding some would-be home buyers back, particularly young adults.<\/p>\n

Indeed, 39 percent of non-owners say they believe they need more than 20 percent for a down payment on a home purchase. Twenty-six percent believe they need to put down 15 to 20 percent, and 22 percent say they need a down payment of 10 percent to 14 percent to buy, according to the National Association of REALTORS\u00ae\u2019 2017 Aspiring Home Buyers Profile report.<\/p>\n

But now for the reality: The average down payment<\/strong> on a purchase mortgage<\/a> was just 11 percent in 2016. And that’s just the average; often times\u00a0down payments are\u00a0much lower. For borrowers under the age of 35, the average down payment was just under 8 percent, according to NAR’s survey.<\/p>\n

As such, \u201caspiring first-time buyers think it takes twice as much to buy a home than\u00a0it really does,\u201d writes Jonathan Smoke, realtor<\/a>.com\u00ae\u2019s chief economist, in his latest column.<\/p>\n

How much a person truly needs for a down payment depends on their situation. Their financial circumstances, home location, and the price of the home are important factors.<\/p>\n

But there are many mortgage options that offer<\/a> the opportunity to make low or even no down payments. For example, the Department of Veterans Affairs and the U.S. Department of Agriculture offer no-money down loans<\/a> to those who are eligible. In 2016, 16 percent of buyers under the age of 35 put no money down on their home purchase.<\/p>\n

Further, the largest share of loans for buyers under age 35 last year were for people putting down less than 5 percent on a home purchase (or about $3,500). The 3 percent down payment programs backed by Fannie Mae and Freddie Mac, and the 3.5 percent FHA mortgage that primarily targets first-time buyers, are both helpful programs to consider. These loan<\/a> programs don\u2019t require unblemished credit either. The average FICO score was 713, but realtor.com\u00ae notes borrowers with a 639 were still getting approved.<\/p>\n

As such, Smoke says the millennial dreaming about homeownership needs to get this message: They need a FICO score of at least 639 and enough for a 5 percent down payment (that is, if they don\u2019t qualify for the other programs with lower payment options). In that case, they’ll need to save about $3,500 to buy in the typical American town.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Speaking of Down Payment, Having the spare capital to put 20 percent down on a home … The Big Down Payment Myth<\/span>Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":24084,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"jetpack_seo_schema_type":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[4],"tags":[4751,518,1403,15239,625,4516,4517,4518,4519,4520,4521,4522,4523,4524,4525,4526,4542,4543,4544,4527,4528,4529,4530,4531,4532,4533,4534,4535,4545,4536,4546,4547,4537,4538,4539,4540,4541,12908,543,627,604,3058,408,1007,41,15296],"class_list":["post-796","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opportunities-in-new-markets","tag-amazing","tag-america","tag-buy","tag-chase","tag-down-payment","tag-down-payment-assistance","tag-down-payment-assistance-california","tag-down-payment-assistance-florida","tag-down-payment-assistance-grants","tag-down-payment-assistance-illinois","tag-down-payment-assistance-nc","tag-down-payment-assistance-ny","tag-down-payment-assistance-ohio","tag-down-payment-assistance-texas","tag-down-payment-calculator","tag-down-payment-conventional-loan","tag-down-payment-equation","tag-down-payment-equity-act","tag-down-payment-estimate","tag-down-payment-in-a-house","tag-down-payment-in-home-loan","tag-down-payment-on-conventional-loan","tag-down-payment-on-investment-property","tag-down-payment-on-rental-property","tag-down-payment-on-second-home","tag-down-payment-receipt","tag-down-payment-refund-law","tag-down-payment-request","tag-down-payment-required-for-home-loan","tag-down-payment-resource","tag-down-payment-resource-center","tag-down-payment-sap","tag-down-payment-savings-account","tag-down-payment-second-home","tag-down-payment-using-credit-card","tag-down-payment-when-buying-a-house","tag-down-payment-with-conventional-loan","tag-home","tag-home-buying-guide","tag-homeowners","tag-loans","tag-location","tag-mortgage","tag-owners","tag-property","tag-target"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/02\/Down-Payment.jpg?fit=1024%2C684&ssl=1","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":7833,"url":"https:\/\/amazingproperty.com.ng\/blog\/conventional-shmonventional-is-a-creative-loan-option-best-for-first-time-buyers\/","url_meta":{"origin":796,"position":0},"title":"Conventional Shmonventional: Is A Creative Loan Option Best For First-Time Buyers?","author":"Amazing Property","date":"January 17, 2018","format":false,"excerpt":"If you're in the market to buy a home and, especially, if it's your first home, you've probably heard A TON about conventional and FHA loans. But just like you're not like anyone else, your financial situation may not be either. The truth is that while you may think you\u2026","rel":"","context":"In "Opportunities In New Markets"","block_context":{"text":"Opportunities In New Markets","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/opportunities-in-new-markets\/"},"img":{"alt_text":"66366858d35c47b62af7299e4ef2141e S.jpg","src":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2018\/01\/66366858d35c47b62af7299e4ef2141e_S.jpg?fit=424%2C283&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":610,"url":"https:\/\/amazingproperty.com.ng\/blog\/what-to-do-if-you-were-counting-on-the-mortgage-premium-cut\/","url_meta":{"origin":796,"position":1},"title":"What To Do If You Were Counting On The Mortgage Premium Cut","author":"Amazing Property","date":"January 25, 2017","format":false,"excerpt":"About that FHA mortgage interest premium (MIP) reduction we wrote about earlier this month\u2026well, never mind. The cut that would have \"lowered premiums to 0.60 percent, saving FHA-insured borrowers with a closing date on or after Jan. 27, 2017 an average $500 this year,\" said RIS Media, is dead. The\u2026","rel":"","context":"In "Mortgage"","block_context":{"text":"Mortgage","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/mortgage\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":8424,"url":"https:\/\/amazingproperty.com.ng\/blog\/much-more-to-mortgages-than-interest-rates\/","url_meta":{"origin":796,"position":2},"title":"Much More to Mortgages Than Interest Rates","author":"Amazing Property","date":"February 26, 2018","format":false,"excerpt":"There's a significant consumer misconception that mortgages are all about interest rates. Find the lowest rate and you've got a great mortgage. Wrong. Yes, the sign-up interest rate can be important, but there is a lot more to consider. The many factors and decisions involved in mortgages determine what the\u2026","rel":"","context":"In "Opportunities In New Markets"","block_context":{"text":"Opportunities In New Markets","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/opportunities-in-new-markets\/"},"img":{"alt_text":"21a8964d6722dd60fe12f91dd284f041 S.jpg","src":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2018\/02\/21a8964d6722dd60fe12f91dd284f041_S.jpg?fit=424%2C274&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":2025,"url":"https:\/\/amazingproperty.com.ng\/blog\/home-loan-right-home\/","url_meta":{"origin":796,"position":3},"title":"Which Home Loan is Right for Your Home?","author":"Amazing Property","date":"March 17, 2017","format":false,"excerpt":"\u00a0 Here are the most popular mortgage loan options in the United States. See basic qualification information and down payments for these home loan options to see which is best suited for you and your next home. \u00a0 Conventional This is the most common mortgage option and usually has the\u2026","rel":"","context":"In "Property buyer"","block_context":{"text":"Property buyer","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/property-buyer\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":31737,"url":"https:\/\/amazingproperty.com.ng\/blog\/do-you-qualify-for-a-usda-loan\/","url_meta":{"origin":796,"position":4},"title":"Do You Qualify for a USDA Loan?","author":"Amazing Property","date":"February 23, 2022","format":false,"excerpt":"The usda loan program is intended to help improve the quality of life and economy in rural America. Interest rates are relatively low. The U.S. Department of Agriculture has its own mortgage program, but it\u2019s likely one of the least-known about. The mortgage assistance program is a zero-down payment option\u2026","rel":"","context":"In "RealEstate"","block_context":{"text":"RealEstate","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/realestate\/"},"img":{"alt_text":"USDA loan","src":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2022\/02\/USDA-loan.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":2385,"url":"https:\/\/amazingproperty.com.ng\/blog\/making-your-down-payment-with-gift-money\/","url_meta":{"origin":796,"position":5},"title":"Making Your Down Payment With Gift Money","author":"Amazing Property","date":"March 22, 2017","format":false,"excerpt":"To take advantage of low interest rates while home prices climb higher and higher, some homebuyers need help accumulating enough money for a down-payment. 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