How Much Should I Save For a Down Payment?

Starting out on your home buying journey can be both exciting and nerve-wracking. You likely have what feels like a million questions, and that’s completely normal! One of the most common questions for a potential home buyer is, “How much do I need to save for my down payment?”. The amount you’ll need to save for your down payment is determined by your financial situation, the housing market you’re looking in, and how much you’d like to pay each month for your mortgage. 

If you think you have to put 20% down, you may have set your goal based on a common misconception. According to Freddie Mac, “The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.” Unless your loan type or provider requires you to put down 20%, it’s not typically required. 

Of course, there are benefits to putting down 20% on a home, like avoiding private mortgage insurance (PMI) and a lower overall payment. But, here’s the reality – according to the National Association of Realtors, the median down payment hasn’t been 20% since 2005. The current median down payment in 2021 is only 13%, and for first-time home buyers it’s even lower at 7%. 

Today's Median Down Payment from NAR

Today’s Median Down Payment from NAR


What Does This Mean for You?

The jig is up! The typical home buyer is putting far less down than 20%, which means you could be closer to your dream of owning a home than you realized. It’s incredibly important to gather as much information as you can on your pursuit of becoming a homeowner. Believe it or not, there are financing options available that offer lower down payments. With an FHA loan, you can put as little as 3.5% down! Are you a veteran? If so, you may be eligible for a VA loan with a 0% down payment option. To learn more about low payment options, click here.

Remember, a 20% down payment isn’t a requirement. If you want to purchase a home this year, let’s connect to start the conversation and explore your down payment options. Give us a call at 562-896-2456! 

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About the Author

Shannon Jones has been selling real estate since 1998 and specializes in listing and marketing homes. She has consistently been one of the top Realtors in the Long Beach area. Prior to her award-winning career in real estate with the Shannon jones Team, Shannon has had successful careers in journalism and public relations. She holds a bachelors degree from UC Irvine and a masters degree from UC Berkeley. Shannon holds E-Pro, CDPE (Certified Distressed Property Expert), and PSC (Pre-Foreclosure Specialist) certifications. Shannon is very personable and maintains a very strong moral compass, always putting the best interest of home buyers/sellers above monetary goals. A California native, Shannon enjoys gardening, travel, reading, cooking and poker when she’s not selling homes MY DESIGNATIONS Lic# 01247705 | CDPE (Certified Distressed Property Expert) | E-Pro | PSC (Pre-Foreclosure Specialist) MY SERVICE AREAS Anaheim Bellflower Buena Park Carson Cerritos Cypress Downey Fountain Valley Garden Grove Huntington Beach La Palma Lakewood Long Beach Los Alamitos Los Angeles County Norwalk Orange County Rossmoor San Pedro Seal Beach Signal Hill South Bay Westminster