Overcoming Down Payment Hurdle
You're ready to buy a home, but the down payment seems like an insurmountable hurdle. Don't throw in the towel yet. It might be easier than you think.
Here are two important things to know.
You don't need a 20% down payment. The need to put 20% down when buying a home is a common misconception — most people pay less. In fact, according to the National Association of Realtors, the average down payment among first–time homebuyers in 2016 was 6%, and 14% for repeat buyers. Plus, options like our Home Possible® mortgages allow qualified borrowers to put down as little as 3%.
Assistance is available. Pulling together enough money for a down payment may be a challenge, but you don't necessarily have to go it alone. Grants and second loans are just two examples of the types of assistance programs that may be available to you.
- Grants — Grants are funds that you do not have to pay back as long as you own and occupy your home for a certain period of time.
- Second mortgage loans — The most common down payment source, many second mortgage loans offered by state and local governments have low or zero interest rates. Payments on second mortgage loans are deferred over a specified time span and, in many cases, the loan is completely forgiven over time.
Certain programs have specific criteria you must meet, such as those targeted to first–time homebuyers, and/or low– and moderate–income homebuyers. You may also be required to take homeowner education counseling, which is always a good idea and can help prepare you for long-term successful homeownership.
To find out more about buying a home, visit My Home® by Freddie Mac for useful information, resources and tips on buying and owning.
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