Are You Saving Too Much Before Buying A House?

No matter how matter how many times you hear you need a 20% downpayment to buy a home, it's still going to be not true.

April 24, 2020 by Dan Green

No matter how matter how many times you hear you need twenty percent down to buy a home, it’s still going to be not true. You don’t need twenty percent down to buy a home.

And that fact makes a data point from Ellie Mae a little more concerning.

The mortgage software firm asked more than three thousand renters: “What’s stopping you from buying a home” and the overwhelming answer was “I haven’t saved enough for a down payment”.

Of all things, saving for a down payment should not be the thing that stops you from buying. After all, there are seven government-backed mortgage programs that let you make down payments of less than five percent — and some don’t even require a down payment at all.

They have brand names.

They’re called HomeReady, HomePossible, HomePath, FHA loans, USDA loans, VA loan, Conventional 97.

Then, there are local government programs. And, they give money to buyers for buying in particular areas. Forgivable money. And it’s there, if you want it.

So, don’t get hung up on the twenty percent down thing if you want to buy a place. Lenders don’t care so much what you put down. They just want to make sure you can make your monthly payments.

And remember, anytime you want to ask questions, or anything else related to buying a house, just hit that chat box. We’re here to help you.

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