Down Payments

The Truth About Mortgage Down Payments

For prospective first-time homebuyers, saving towards the costs of purchasing a home is often a primary focus. Although, the down payment may be the biggest concern. It is common for one to think 20% down payment is necessary. However, according to the National Association of Realtors (NAR), it may not be a mandatory requirement.

One of the biggest misconceptions among housing consumers is what the typical down payment is and what amount is needed to enter homeownership.”

And a recent Freddie Mac survey finds:

. . . nearly a third of prospective homebuyers think they need a down payment of 20% or more to buy a home. This myth remains one of the largest perceived barriers to achieving homeownership.”

The positive news is that, unless stipulated by your loan category or financial institution, putting down 20% isn’t a prerequisite. That implies that you might be closer to your dream of homeownership than you think.
As per NAR, the median down payment has not exceeded 20% since 2005. Presently, homebuyers’ median down payment is only 14%, with first-time homebuyers going even lower at just 6%, as illustrated in the below graph:
What does this mean for you? It means you may not need to save as much as you originally thought.
There are numerous misconceptions regarding down payment assistance programs, including the notion that such assistance is exclusively reserved for first-time buyers. However, Down Payment Resource reports that over 2,000 homebuyer assistance programs, most of which are intended to help with down payments, are available in the U.S. First-time buyers have a variety of options to explore, and repeat buyers have options as well.
Additionally, specific loan types, such as those offered by FHA with minimal down payment requirements at 3.5%, or VA and USDA loans with zero down payment demands for qualified candidates, are available. To receive more information on desirable aid schemes for down payment, websites like Down Payment Resource exist. Subsequently, one may join hands with reliable lenders to gain insight on home buying qualifications.
Please note that a 20% down payment is not always mandatory for purchasing a home. If you wish to buy a home this year, let us discuss your homebuying objectives. Reach out to connect with us.

About Diane Casey Luong

As an award-winning, full-time Realtor®, Diane is a proven leader among Worcester MA real estate agents, fully committed to you and your property goals.

As a requested speaker, Diane educates audiences on topics such as the purchasing foreclosure properties, nuances of the real estate market from neighborhood to neighborhood, and understanding the ever-changing trends in the real estate industry.

A graduate of the Massachusetts Academy of Real Estate, Diane has brought her expertise in real estate to Worcester, MA, and its surrounding towns.


Diane Casey Luong
RE/MAX Vision
25 Union Street
4th Floor
Worcester, MA 01608