Did You Know? 80% of First-Time Homebuyers Qualify for Down Payment Assistance—But Only 13% Take Advantage
If you're planning to buy your first home, this statistic highlights a critical opportunity you shouldn’t miss (see graph below).
Here’s how you can maximize your down payment in today's housing market.
Unlock Your Down Payment Potential
As a first-time buyer, it’s essential to explore the various resources available to help with your down payment. Many of these options can accelerate your homeownership journey faster than you might expect.
For instance, some loan programs require just 3% down, and qualified borrowers, like Veterans, may even qualify for 0% down payment options. Additionally, there are down payment assistance programs, including grants and other incentives, that can cover some of the upfront costs.
If you're interested in these options, connecting with a trusted lender is key. Without exploring these opportunities, you could miss out on financial assistance that could make homeownership more affordable. Leveraging these resources could boost your down payment, potentially lowering your monthly mortgage payment and reducing or eliminating costs like private mortgage insurance (PMI).
Don’t Be Intimidated by News on Rising Down Payments
Recent headlines about rising down payments might be concerning. According to Redfin:
“The typical down payment for U.S. homebuyers reached a record high of $67,500 in June, a 14.8% increase from $58,788 a year ago. This marked the 12th consecutive month of year-over-year increases.”
But don't let those numbers discourage you. Just because average down payments are rising doesn’t mean the required minimum down payments are increasing. This shift is largely driven by current homeowners who are putting more money down to offset higher mortgage rates and tapping into the equity they’ve built up over time.
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 this down:
- Bigger down payments lower monthly mortgage costs. With affordability being a challenge for many buyers, those who can afford to put down more money are doing so to reduce their future housing expenses.
- Homeowners have more equity to leverage. Those who already own homes have gained significant equity due to home price appreciation in recent years. This allows them to make larger down payments on their next property, a luxury many first-time buyers might not have.
Bottom Line
The best thing you can do is consult a trusted lender to review your options. They’ll help you understand where you stand financially and how to access down payment assistance programs you might qualify for. There’s help out there—working with the right professionals can make all the difference.