Believe it or not, almost 80% of first-time homebuyers qualify for down payment assistance, but only 13% actually use it. And if you’re hoping to buy a home, this is a mission-critical gap to close – fast (see graph below):
Here’s what you need to know to make the most of your down payment in today’s housing market.
Amplify Your Down Payment Potential
For first-time buyers, the name of the game with down payments is making sure you’re taking advantage of all the resources out there designed to help you. And a bunch of them can get you to your goal faster than you may have thought possible.
For example, there are loan options that require as little as 3% down, or even 0% for certain qualified borrowers, like Veterans. And let’s not forget down payment assistance, like grants and other opportunities, that help you cover the upfront cost of your down payment.
If you’re interested in exploring those options and what you may be able to use to your advantage, connect with a trusted lender. Because if you don't at least see what’s available, you could be leaving money on the table and missing your chance at buying a home. These resources can boost your down payment. And a higher down payment could help lower your eventual monthly mortgage payment, and even avoid or reduce your fees like private mortgage insurance.
Don’t Let News Headlines About Down Payments Scare You
There’s one more thing to address. News coverage has been talking about how the typical down payment is rising. A report from Redfin states:
“The typical down payment for U.S. homebuyers hit a record high of $67,500 in June, up 14.8% from $58,788 a year earlier . . . This was the 12th consecutive month the median down payment rose year over year.”
But don’t let those high dollars scare you. Just because the average down payment is rising doesn’t mean down payment requirements are going up. That’s a key piece of the puzzle to understand. It’s really just because people are choosing to put more down to try to offset higher mortgage rates, and current homeowners who are putting their equity to work are using that to increase their down payment on their next home. As HousingWire explains:
“. . . buyers are putting down a higher percentage of the purchase price to lower their monthly mortgage payment. And buyers also had more equity from their home sales, which gives them more cushion.”
Let’s break those two reasons down a bit:
1. A bigger down payment helps lower your monthly mortgage payment. Affordability has been a challenge for many buyers recently, which is why those who have the ability to make a bigger down payment are going to do so in an effort to lower their future housing costs.
2. Buyers who already own a home have a record amount of equity to leverage. Someone who bought a home a few years ago has gained a significant amount of value in their house, thanks to home price appreciation. These people can put down much more than the average first-time buyer who hasn’t owned a home yet.
Bottom Line
Navigating the world of down payment assistance can be challenging, but Triangle Experts is here to guide you every step of the way!
When considering homeownership, it’s essential to talk with a trusted lender about your options. A knowledgeable lender can help you assess your financial situation by understanding your current financial standing, credit score, and budget to determine how much house you can afford. They will also explore the various assistance programs available, including grants, loans, and other financial resources tailored to your needs. Additionally, they can provide clarity on the eligibility requirements you need to meet to access these resources, making the process smoother and more efficient.
Remember, help is out there; you just need to collaborate with a professional to make the most of it! For detailed guidance and personalized assistance, reach out to Triangle Experts today. Our team of experienced professionals is dedicated to helping you find the right resources and support to make your homeownership dreams a reality! Whether you have questions about specific programs or need help connecting with lenders, we’re here for you every step of the way. Don’t hesitate—let’s get started on your journey to homeownership!
