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Think You Have to Put 20% Down? Most First-Time Homebuyers Don’t in Miami-Dade, Florida.
According to Google Trends, online searches for down payment information recently hit an all-time high. And that’s a clear sign more buyers are trying to figure out what they really need to save before making a move (see graph below):
If you’re wondering the same thing, you can always turn to the internet for answers. But more often than not, it’s better to ask a local expert. Because here’s what a pro would tell you.
The 20% Down Payment Myth
The idea that you need 20% down to buy a home is one of the biggest misconceptions around the homebuying process. And the data debunks the myth.
While there are benefits to putting that much money down, most first-time buyers put down far less.
Here’s why: Unless your lender specifically requires it, you typically do not need a 20% down payment. There are even loan options available that can help you purchase a home with a much smaller upfront cost. As the Mortgage Reports explains:
“The amount you need to put down will depend on a variety of factors, including the loan type and your financial goals. If you don’t have a large down payment saved up, don’t worry—there are plenty of options available, and you don’t need to put down the traditional 20% . . . many homebuyers can secure a home with as little as 3% or even no down payment at all . . .”
For example, FHA loans may allow down payments as low as 3.5%, while VA and USDA loans offer zero-down payment options for qualified applicants, including Veterans.
Those options are just one of the reasons many first-time buyers can purchase a home without putting 20% down.
What Buyers Are Actually Putting Down
So, if buyers aren’t doing the 20%, how much do they actually put down?
According to the National Association of Realtors (NAR), the median down payment for first-time homebuyers is only 10%. That’s half of what you probably expected.
That means if you’re aiming to save 20% because you think you have to, you may be setting a timeline that’s longer than necessary.
And here’s some more good news. It’s not only that you may be able to buy with less money down than you thought, but there are also options to help you get to your down payment goal even faster.
Why You Should Look into Down Payment Assistance Programs
There are a lot of programs designed to help you save for a down payment – and they can make a big difference in how fast you hit your savings target. Unfortunately, buyers don’t realize how many there are, or that they may qualify for help.
Research from Realtor.com shows almost 80% of first-time homebuyers qualify for down payment assistance (DPA), but only 13% actually use it (see chart below):
And that’s another big miss holding would-be buyers like you back.
In the U.S., there are more than 2,600 homeownership programs available, with many offering substantial financial assistance. As Down Payment Resource shares:
“With an average benefit of $18,000, down payment assistance (DPA) remains one of the most essential tools for addressing the nation’s affordability challenges. Programs continue to expand in scope, serving a broader range of incomes, property types, and borrower needs, including first-generation, military, and repeat buyers.”
Imagine how much further your savings could go with an extra $18,000 you can use to buy. In some cases, you may even be able to stack multiple programs, giving what you’ve saved an even bigger boost.
Bottom Line
The simple truth is: most first-time buyers don’t put 20% down. If you’ve been holding off on buying until you’ve saved that amount, you may be giving yourself a longer timeline than needed.
To find out what you really need to save and if you qualify for any help, connect with a trusted lender who can walk you through your options. You may be able to buy sooner than you thought.
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Looking for your next home in North Miami Beach? Reach out to Ralph Magin, your dependable real estate guide, at 305‑741‑2142 or visit ralphmagin.com today.
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