The biggest reason people claim for delaying purchasing their first home is having a home down payment. Most people still think that they need to have 20% down before they can purchase a home. While having 20% down sure helps, it isn’t always necessary.
According to Realtor.com®’s research, the average home down payment is actually 11%. This varies by circumstances such as if you are doing a jumbo loan, VA, FHA, or USDA loan. The last 3 types of loans average a home down payment of 4.8 percent, 2.2 percent, and 0.4 percent respectively.
There are several programs available to help first- time home buyers get into their first home without needing a large home down payment.
There are programs such as the Home Advantage DPA program and the HomeChoice program. The Home Advantage DPA program has a statewide income limit of $97,000. You must also attend a commission-sponsored home buyer seminar. The maximum loan amount is up to 4.00%. See more details here.
The HomeChoice Second Mortgage program is a home down payment assistance program for low-to-moderate income people with a disability, or who have a family member with a disability, living with them and qualify for Home Advantage first mortgage loan program. A 1.00% interest rate on the Down payment Assistance loan program for first-time home buyers (borrowers who haven’t owned and occupied their primary residence in the past three years). If you buy in a targeted area you do not have to be a first-time home buyer. It has an income limit in our county of $76,500. Other requirements may apply. Please check with your lender or service provider to verify the limits. Manufactured homes only allowed with FHA, VA and USDA Rural Development financing. HomeChoice borrowers also must complete a Commission-sponsored home buyer education seminar prior to reservation of funds.
The Washington State Finance Commission has more details on their page as well.
So, don’t let the belief that you HAVE to have saved for a 20% home down payment stop you from your first home purchase. Talk with a mortgage broker about your options. It is always “best practice” to get ready… before you think you need to. Give yourself 6 months to a year to get everything in line. A good mortgage broker can help you find out what you can do to raise your credit score too, so you are in the best possible position when you are ready.
*These programs are subject to change. This blog is for informational purposes only and is not a guarantee, nor guarnateed to be current. Always do your due diligence.
See more of this article by Realtor Mag.
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