What are Some Down Payment Misconceptions?

Many hopeful homebuyers delay their purchase due to myths about down payment requirements. According to data gathered from the National Association of Realtors, 35% of consumers believe that they need a downpayment of at least 16% of their homes purchase price. In comparison to this number, only 10% believe that they are required to have more than 20%. 

On average, the typical downpayment for a home is lower than both of those percentages. The National Association of Realtors reports that in 2021, repeat buyers averaged 17% for the downpayment, while first-time homebuyers averaged 7%. This difference is due to the fact that FHA loans can allow borrowers to put down as little as 3.5% on the purchase of a home. 

As home equity grows, so do the down payments for many repeat home buyers. However, first-time homebuyers may have more flexible requirements to take advantage of, depending on their eligibility. 

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If you have questions about real estate, local real estate agents, or a down payment, don’t hesitate to reach out!