It’s house-buying season. Spring and summer are the busiest times of year for the housing industry, since showing a home in warm weather is much easier around most of the country than in multiple feet of snow. That said, as you consider buying your first home, chances are you may be a little confused about the cost of a house down payment. Don’t feel bad, 66% of people in your place have the same issue.
Where does this confusion come from? Think about who you told when you decided to buy a home. You parents, friends, even Aunt Edna, right? It’s an exciting time and everyone wants to offer their advice. Add to all these supportive people in your life and the good possibility that you did some online research about home buying before making your final decision. The web is chock full of varying advice on the subject, the most common misconception being that a 20% down payment is required to buy a home.
CEO of Genworth Mortgage Insurance, Rohit Gupta, says:
“While first-time homebuyers continue to drive the purchase market, we believe many are staying on the sidelines due to the misconception that a 20 percent down payment is required to secure a mortgage.
There are various low down payment options available today that allow prospective homebuyers to reach their dreams of homeownership sooner. It is crucial that, as an industry, we proactively educate eligible borrowers about solutions that will enable them to buy a home when they’re ready.”
Buying a home is a long-term investment, and the weight of a large down payment could be used to discourage the less-than-serious buyer from entering the scenario. That said, if misguided concerns about the amount of money needed to put down on a home are keeping viable potential home buyers from entering the market, the long-term effects on the housing market could be disastrous.
If you are looking to buy a home, the best course of action is to talk to a local mortgage professional and get the skinny on your specific situation, based on the type of home you seek to buy, your credit history and income. Armed with that information, you will be able to confidently enter into a home buying scenario without a care that you will qualify for the mortgage you want.