How Much of a Down Payment Do You Really Need to Buy a Home, According to Andrew Shader?


When homebuyers ask how much of a down payment they need to purchase a home, the typical answer is 20%. This number is a common misconception, though, at least according to Andrew Shader. 

In a recent Lending Tree survey, consumers were asked what the biggest hurdle is that they face when trying to purchase a home. More than 50% of them said that the ability to come up with the down payment was their number one challenge. However, many of those respondents may have been under the assumption that a 20% down payment was necessary.

Trying to come up with 20% often seems overwhelming for homebuyers. Unfortunately, this myth often causes people to give up on their dreams of owning a home before they ever really get started. 

The Median Down Payment Required for a Home

Today, the median down payment required to purchase a home isn’t 20% of its purchase price. In fact, according to the National Association of Realtors, it hasn’t been 20% since 2005. 

The average down payment amount required for the purchase of a home today is only 12%. If you’re a first-time homebuyer, there’s even better news: The average down payment for your group is just 7%.

What This Means for You

Even though saving to purchase a home with any kind of down payment might seem like a huge endeavor, it’s important to realize that you don’t need to put the full 20% down for every loan program. 

There are many programs that are available to home buyers that only require a down payment of as little as 3.5% of the purchase price. Better still, there are some options that allow qualified buyers to put absolutely nothing down on a home, including USDA loans and VA loans.

You’ll need to do some research to learn about all available options out there and to see which ones you would qualify for. There are resources online that have a hefty amount of information on the various down payment assistance programs. However, a qualified real estate advisor is going to be your best source of information when it comes to exploring your options. 

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