By Fabi R. Gomes | May 20th, 2019
According to the National Association of REALTORS®, some of the biggest misconceptions regarding the homebuying process are related to down payments. Here are some of the myths and expectations you may want to consider before buying a home.
1. No, you DON’T need 20% down payment
Although the “20% down payment” myth is widely circulated, here’s the good news: no, you DON’T need a 20% down payment to buy a house. Without such a down payment, buyers are typically subject to mortgage insurance payments, which can add to monthly housing costs. To avoid mortgage insurance payments, buyers have been habituated to put 20% down, but it is not a prerequisite. First-time homebuyers may be eligible for zero down financing, in some cases. The best thing to do is talk to your lender and your real estate agent to learn if you qualify for a low down payment.
2. Low down payment is NOT only for first-time homebuyers
A low down payment is available to many qualified homebuyers, whether they are financing their first-ever home or their second (or more!) home. Though some down payment assistance is tailored to first-time homebuyers, a low down payment option is also available to qualified buyers that already own a home.
3. It is NOT difficult to qualify for down payment assistance
Misconceptions about down payment assistance programs abound, including the belief that programs are only available for first-time homebuyers and that programs aren’t available in your community. On the contrary, there is down payment assistance to buyers with all levels of income with a variety of credit scores–and it may be easier than you think! Talk to your lender and your real estate agent; you may be eligible for assistance without realizing it.
4. You may be able to use money that has been gifted to pay for you down payment
This depends on your lender of choice. However, many lenders allow buyers to use gifts, grants, or loans to pay for some, and sometimes all, of the down payment. Every situation and loan are different. When you speak with your lender, make sure they understand that gift funds will be used, since rules and regulations apply.
If you are ready to buy a home, or if you have any questions, talk to one of our CBHarper agents.
Coldwell Banker D’Ann Harper, REALTORS® can be reached at (210) 483-7581 or firstname.lastname@example.org and has been an affiliate of the Coldwell Banker franchise system for over 30 years. Visit our Facebook page, Blog, and YouTube channel for supportive content and articles.
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