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You are here: Home / Blog / Tips for Home Buyers

Do you have enough money saved for a down payment?

October 17, 2020

Do you have enough money saved for a down payment?

One of the biggest misconceptions for home buyers is how much you’ll need to save for a down payment. Contrary to popular belief, you don’t always have to put 20 percent down to buy a house.

A recent survey by Point2Homes notes that 88 percent of buyers say “they have significantly less savings than the average national down payment amount, which is $62,600.”

Thankfully, neither 20 percent, nor $62,600., is not the amount every buyer needs for a down payment. There are many different options available. 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):

2019 Median Percent Down Payment by U.S. Home Buyers:

2019 Median Percent Down Payment by U.S. Home Buyers

That means if a qualified home 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.

Typically, qualified buyers can obtain a Conventional loan with as little as a 5 percent down payment, and in some cases, as low as 3 percent down. (Although those programs will require mortgage insurance.)

There are also programs like FHA Loans where the down payment can be as low as 3.5 percent, and other programs such as USDA and VA loans that waive down payment requirements.

Unfortunately, the lack of knowledge about the home buying process is keeping many motivated 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 myths about home buying keep you out of the housing market. Let’s connect to discuss your options today.

Filed Under: Tips for Home Buyers Tagged With: Closing Costs, Down Payment

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"As Real Estate Brokers in Hawaii for more than 40 years, we know how important a good agent is when looking to buy property when you can’t be there. After seeing a property listed by Russ, we called and talked with him. He came across as very knowledgeable, competent, helpful, and friendly so we asked Russ to send us new listings for the type of property we were looking for, which he did. When a property came up that we liked we contacted Russ and had him arrange to show the place to our son who lives in Green Valley. Everything looked great so we had Russ write and present our offer, which was accepted. Russ followed through with everything required and kept us up to date each step through escrow and the final closing. We are very happy with how Russ treated us and made sure everything got done when it needed to be done. Every step of this purchase was handled by phone and email. We recommend Russ to everyone looking for a good agent to represent them in Real Estate."
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Russ Fortuno, Associate Broker

I'm a Southern Arizona native and year-round Green Valley resident. Whether you’re buying or selling a home in the Green Valley or Sahuarita area, you’ll experience unsurpassed service and professionalism at all stages of your real estate transaction. I welcome the opportunity to assist in your next home sale or purchase.
Meet Russ

Tierra Antigua Realty

18745 S. I-19 Frontage Rd., Ste. A105
Green Valley, AZ 85614
(520) 333-0446
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