If you need assistance, please call 630-276-7575

Do You Have Enough Money Saved for a Down Payment?

Tuesday, October 13, 2020   /   by Teresa Ryan

Do You Have Enough Money Saved for a Down Payment?

One of the biggest misconceptions for first-time homebuyers is how much you’ll need to save for a down payment. Contrary to popular belief, you don’t always have to put 20% down to buy a house. Here’s how it breaks down.


A recent survey by Point2Homes mentions that 74% of millennials (ages 25-40) say they’re interested in purchasing a home over the next 12 months. The study notes, “88% say they have significantly less savings than the average national down payment amount, which is $62,600.”


Thankfully, $62,600 is not the amount every buyer needs for a down payment in the United States. There are many different options available, especially for first-time homebuyers (millennial or not). That amount can also be significantly less, depending on the purchase price of the house.


According to the National Association of Realtors (NAR), “The median existing-home price for all housing types in August was $310,600.” (These are the latest numbers available). NAR also indicates that:


“In 2019, the median down payment was 12 percent for all buyers, six percent for first-time buyers, and 16 percent for repeat buyers.” (See graph below):
kcm-infographic-1602614928.jpg

That means if a qualified first-time buyer purchases a home at today’s median price, $310,600, with a 6% down payment, in reality, the down payment only amounts to $18,636. That’s nowhere near $62,600.


Knowing there are also programs like FHA where the down payment can be as low as 3.5% of the purchase price for a first-time buyer, that up-front cost could be significantly less – as little as $10,871 for the same home noted above. There are also other programs like USDA and loans for Veterans that waive down payment requirements.


The Point2Homes study also shares how much millennials have indicated they’ve saved for a down payment. As we can see in the graph below, 39% have already saved enough for a down payment on a median-priced home. Another 47% are close to reaching that goal, depending on the purchase price of the home.
kcm-infographic-1602614932.jpg


Unfortunately, the lack of knowledge about the homebuying process is keeping many motivated first-time buyers on the sidelines. That’s why it’s important to contact a local real estate professional to understand the requirements in your local area if you want to buy a home. A trusted agent and your lender can guide you through the process.


Bottom Line

Be careful not to let big myths about homebuying keep you and your family out of the housing market. Let’s connect to discuss your options today.


Call Teresa Ryan at 630-718-0424 today, for your home buying and selling needs in Naperville and the Western Suburbs of Chicago. For inquiries, please call 630-276-7575.

Subscribe to our YouTube Channel for real estate insights, updates, and news!
http://bit.ly/RHGChannel

Join us on social:
Facebook: https://www.facebook.com/RyanHillGroup/
Twitter: https://twitter.com/ryanhillgroup
Instagram: https://www.instagram.com/ryanhillgroup/


  naperville il, teresa ryan, century 21 affiliated naperville, ryan hill group, homebuyer, homebuying tips, first time homebuyer, home buying tips, buy a house, home search, downpayment

Ryan Hill Group - Century 21 Affiliated
Teresa Ryan
1288 Rickert Dr, Ste 300
Naperville, IL 60540
630-276-7575
630-718-0424

The data relating to real estate for sale on this website comes in part from the Broker Reciprocity program of Midwest Real Estate Data LLC. Real Estate listings held by brokerage firms other than Teresa Ryan - Ryan Hill Group - Century 21 Affiliated are marked with the Broker Reciprocity logo or the Broker Reciprocity thumbnail logo (a little black house) and detailed information about them includes the names of the listing brokers. Some properties which appear for sale on this website may subsequently have sold and may no longer be available. The information being provided is for consumers' personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. © Many homes contain recording devices, and buyers should be aware they may be recorded during a showing. Copyright © 2020 Midwest Real Estate Data LLC Information deemed reliable but not guaranteed. Properties marked with the MRED icon are provided courtesy of Midwest Real Estate Data, LLC. Broker Reciprocity. Use of this site constitutes agreement to the terms and conditions. DMCA Notice
This site powered by CINC: www.cincpro.com