Homes

The myth of the mortgage down payment

Information Provided by the Kansas City Regional Association of REALTORS

Find a Realtor and discuss your budget and needs. This will help a Realtor hone in on your search parameters, and only show you available homes in your price range.
Find a Realtor and discuss your budget and needs. This will help a Realtor hone in on your search parameters, and only show you available homes in your price range. iStock

Did you know that the median down payment for first-time homebuyers has been 6 percent for three straight years?

If you answered “No” to this question, you are likely not alone.

According to the National Association of Realtors Aspiring Home Buyers Profile, 87 percent of non-homeowners indicated they believed that a mortgage down payment of 10 percent or more is necessary.

The Aspiring Home Buyers Profile also finds that eight out of 10 non-homeowners indicated that owning a home is part of their American Dream. Yet, the confusion about down payment requirements is keeping these aspiring homebuyers from breaking into the real estate market.

Being unable to afford to buy was the number one reason non-homeowners cite as the reason they do not own. This, and unrealistic expectations about down payments, have likewise kept creditworthy borrowers with manageable levels of debt from exploring the prospects of buying a home.

Every prospective buyer is different. But before throwing in the towel on the homeownership dream, those interested in buying their first home in 2017 should gather their financial paperwork, sit down with a lender to discuss their qualifications, and talk to family and friends for recommendations about a Realtor who can help them get started on their home search.

Whether you have a sizeable amount of money to put down, or you have less than what would comprise a 20 percent down payment, following are a few tips to help get you get started:

Review your financial situation and personal savings to determine how much you can comfortably use for a down payment.

Visit a few lenders and seek a mortgage preapproval to determine how much money you are actually qualified to borrow.

Find a Realtor and discuss your budget and needs. This will help a Realtor hone in on your search parameters, and only show you available homes in your price range.

Rely on professional help from the experts. This includes a Realtor and your lender. The U.S. Department of Housing and Urban Development also has a state-by-state resource guide of homeownership and home buying assistance programs available in your state.

Buying a home can sometimes be a challenging process. But with a little work and a member of the National Association of Realtors at your side, 2017 may be a good time to start looking.

For more information, visit the Kansas City Regional Association of REALTORS website at www.KCRealtorLink.com, or call them at (913) 498-1100, to connect with a Realtor and learn more about buying a home.

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