One of the biggest misconceptions about buying a house is that you’re required to have 20% down. Now, if you have the 20% - great. This means you’ll finance less, and possibly
The 20% down myth!
Dated: May 2 2019
One of the biggest misconceptions about buying a house is that you’re required to have 20% down.
Now, if you have the 20% - great.
This means you’ll finance less, and possibly secure a lower rate. And you’ll get to avoid having to pay PMI (private mortgage insurance). It can also work to your advantage if the home you want to buy has multiple offers to consider.
However, if having 20% down isn’t realistic for you, don’t count yourself out. You can go as low as 5%, 3.5% and 0% down with some loan types. There are also things like grants and other programs for those that are eligible.
You may be able to purchase a home sooner than you think!
A previous client I worked with took advantage of the First Home Club to purchase her first home. She was a single gal and a hard worker who wanted to get out of her current living situation. She knew she was taking on a huge responsibility on her own. She took advantage of available assistance to make sure she stayed within her budget limits.
My client applied for the First Home Club, a savings plan available for first home buyers who are eligible. The plan allowed a monthly savings contribution from the buyee, while the bank matched their savings $4 to $1. She qualified for the program with a conventional, loan only needing 5% down. Upon completion of the program, She had saved a total of $1875. The bank contribution was $7500, giving her a total of $9375 to use towards a down payment! This was a huge help and opened doors for opportunity!
Being fully aware of what options were available to her, she was able to purchase a home with confidence knowing she has chosen the program that was best fit for her situation.
Had she not explored her options, saving enough until she felt comfortable to buy would have taken much longer!
My name is Jenna Casillo, and I’m a full time realtor in the WNY area, where I was born and raised. Prior to entering the real estate industry, I spent 4 years in the freight forwarding business....