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Do You Have Enough Money Saved for a Down Payment?

Do You Have Enough Money Saved for a Down Payment? | MyKCM
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.”

Thankfully, that national average 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.

The National Association of Realtors (NAR) 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):

Do You Have Enough Money Saved for a Down Payment? | MyKCMThat means if a qualified first-time buyer purchases a home at today’s national 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.Do You Have Enough Money Saved for a Down Payment? | MyKCMUnfortunately, the lack of knowledge about the home buying process is keeping many motivated first-time buyers on the sidelines. That’s why it’s important for us to connect so you can understand the requirements in our 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 home buying keep you and your family out of the housing market. Let’s connect to discuss your options today.

Ryan Dallas

Ryan Dallas and his team of professionals at Ryan Dallas Real Estate are the #1 real estate team in the east Central Illinois area for homes sold and client satisfaction with more than 5000 families served in the last decade and more than 1000 Google Reviews. Ryan Dallas Real Estate has been voted the #1 Real Estate Company in the Champaign-Urbana News-Gazette People's Choice Awards for seven consecutive years and is proud to be the Official Real Estate Team of the Fighting Illini. Serving the greater Champaign-Urbana, Bloomington-Normal, Mattoon-Charleston, and Danville areas, Ryan's team of specialists put a high focus on delivering a home buying and selling experience that is centered on service and results. Ryan Dallas Real Estate ranked #7 in the nation in 2024 for closed sales by Real Trends and The Wall Street Journal. In addition to being a consistent top team in the Champaign County Association of Realtors, Ryan's success earned him a ranking in the top 1% of Keller Williams worldwide before he launched Ryan Dallas Real Estate, an independent brokerage in early 2018.

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