Believe It or Not: Most First-Time Homebuyers Get Down Payment Assistance
Nearly 80% of first-time homebuyers are eligible for down payment assistance, yet only 13% actually take advantage of it. If you’re looking to buy a home, closing this gap is critical—and quickly.
Here’s what you need to know to maximize your down payment in today’s real estate market.
Boost Your Down Payment Potential
For first-time buyers, the key to success is tapping into all the available resources designed to help you. Many of these resources can help you reach your home-buying goal faster than you may think.
For example, some loan programs require as little as 3% down—or even 0% for certain qualified buyers, such as veterans. There are also down payment assistance programs, like grants and other opportunities, to help cover the upfront cost of your down payment.
If you’re interested in exploring these options and understanding what may work for you, connect with a trusted lender. Without at least investigating what’s available, you might leave money on the table and miss your chance to buy a home. These resources can increase your down payment, potentially lowering your monthly mortgage payment and reducing or eliminating costs like private mortgage insurance (PMI).
Don’t Let Headlines About Rising Down Payments Scare You
There’s one more issue to address. Recent news headlines have highlighted how the average down payment is increasing. A report from Redfin states:
“The typical down payment for U.S. buyers hit a record high of $67,500 in June, up 14.8% from $58,788 a year earlier… This was the 12th consecutive month the average down payment climbed year over year.”
However, don’t let those figures intimidate you. Just because the average down payment is rising doesn’t mean down payment requirements are increasing. That’s a crucial distinction.
The rise in average down payments is due to buyers choosing to put more money down. This is often done to offset higher mortgage rates, and many existing homeowners are using equity from their current homes to increase their down payments when purchasing their next property. As HousingWire explains:
“…buyers are putting down a higher percentage of the purchase price to reduce their monthly mortgage payments. And buyers also have more equity from their home sales, which gives them a larger cushion.”
Let’s break down those two reasons:
- A Larger Down Payment Lowers Your Monthly Mortgage Payment
Affordability has been a challenge for many buyers recently. Those who can afford to make a larger down payment are doing so to lower their future housing costs. - Existing Homeowners Are Leveraging Record Equity
Buyers who already own a home have gained significant equity thanks to home price appreciation in recent years. This equity allows them to put down more money than first-time buyers who don’t yet have a home to sell.
Bottom Line
What’s the best course of action? Talk to a trusted lender about your options. They can help you figure out where you stand today and identify resources you may qualify for. Assistance is available—you just need to work with a professional to take full advantage of it.