Think You Have To Put 20% Down? Most First-Time Homebuyers Dont.

According to Google Trends, online searches for down payment information recently hit an all-time high. And thats a clear sign more buyers are trying to figure out what they really need to save before making a move (see graph below):

If youre wondering the same thing, you can always turn to the internet for answers. But a lot of the time, its better to ask a local expert. Because heres 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.

Heres why. Unless its stated by your lender, you typically dont have to have a 20% down payment. There are even some loan options designed to help you get into 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 dont have a large down payment saved up, dont worrythere are plenty of options available, and you dont need to put down the traditional 20% . . . many homebuyers are able to secure a home with as little as 3% or even no down payment at all . . .

For example, FHA loans allow down payments as low as 3.5%, while VA and USDA loans offer zero down payment options for qualified applicants, like Veterans.

And those options are just one reason so many first-time buyers are able to buy without a 20% down payment.

What Buyers Are Actually Putting Down

So, if buyers arent doing 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%. Thats half of what you probably expected.

That means if youre aiming to save 20% because you think you have to, you may be setting a timeline thats longer than necessary.

And heres some more good news. Its 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 dont 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 thats another big miss holding would-be buyers like you back.

In the U.S., there are over 2,600 homeownership programs available, many offering significant financial support. 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 nations 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 youve saved an even bigger boost.

Bottom Line

The simple truth is: most first-time buyers dont put 20% down. And if youve been waiting to buy until you have that saved, you may be setting a timeline thats longer than necessary.

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.