The Truth About Down Payments

April 15, 2024

Homebuyers, do you want to know the truth about down payments? If you are planning to buy your first home in the near future, you may want to know this information regarding down payments. Unless specified by your loan type or lender, it’s typically not required to put down 20% when purchasing a home. In fact, you may even be able o get your foot in the door with 0% down.

This is fantastic news, as it may mean you are closer to your home buying goal than you you previously thought. According to the Mortgage rate, and I quote, “Although putting down 20% to avoid mortgage insurance is wise if affordable, it’s a myth that it is always necessary” end quote. The truth to be told is most people opt for a much lower down payment. The National Association of Realtors says the median down payment hasn’t been over 20% since 2005. So, the big takeaway here, and one you should be excited about as a homebuyer is you may not need to save as much as you originally thought. Of course, all loans and lenders are different, so it is always best to do your own research and homework.

And remember, experts predict home prices to keep appreciating over the next five years, which means your future home will likely go up in price the longer you wait. If you would like more information on the current inventory and prices in the San Luis Obispo County area, please reach out to schedule a complimentary strategy session. I am Amber Johnson, Founder of Pillar Real Estate and I am here to help you make informed real estate decisions.