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Do I really need a 20% down payment to buy a home?

Is the idea of ​​saving for an initial payment preventing you from buying a home now? You may be eager to take advantage of today's low mortgage rates, but the thought of needing a large down payment can make you want to hit the brakes.

Today, there is still a common myth that you need to reach 20% of the total sale price for your payment. This means that people who could afford to buy a home may be postponing their plans because they do not yet have a lot of money saved. The reality is, if you are looking for your first home or you have bought one before, you probably do not need to put 20% down. Here's why.

According to Freddie Mac:

"The most damaging myth of down payment - since it interrupts the process of buying a home before it can begin - is the belief that 20% is necessary."

If saving so much money seems daunting, potential buyers may give up on the dream of home ownership before they even start - but it is not necessary.

Data from the National Association of Realtors (NAR) 2020 Buyer and Seller Profile indicates that the median down payment has not exceeded 20% since 2005 and, nonetheless, was for repeat buyers, not for the first time home buyers. . As the image below shows, today's median down payment is clearly less than 20%.

What does this mean for potential home buyers?

As we can see, the median of the initial payment was lower for first-time buyers, with the percentage of 2020 reaching 7%. If you are a first-time buyer and bet on 7% still seems high, understand that there are programs that allow qualified buyers to buy a home with an initial payment of up to 3.5%. There are also options like VA loans and USDA loans with no payment requirements for qualified applicants.

It is important for potential buyers (whether they are repeat buyers or for the first time) to know that they probably do not need to reduce the purchase price by 20%, but they must do their homework to understand the options available. Make sure you work with trusted professionals from the beginning to find out what you can qualify for in the process of buying a home.


Don't let the myths of the down payment keep you from reaching your home ownership goals. If you plan to buy a house this year, we will connect to review your options.

«Do you want to build wealth? Buy a home this year.

The information contained and the opinions expressed in this article should not be interpreted as investment advice. Keep Current Matters, Inc. does not warrant or guarantee the accuracy or completeness of the information or opinions contained herein. Nothing here should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keep Current Matters, Inc. will not be responsible for any loss or damage caused by your reliance on the information or opinions contained herein.



We believe that every family should feel confident when buying and selling a home.

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