Long-gone are the days of the requisite 20 percent down payment needed to buy a home. In today’s housing market, there are a variety of low-down payment programs available to home buyers to make purchasing a place to live much easier. Despite this, 35 percent of consumers believe a down payment of 16 to 20 percent of a home’s purchase price is needed. This latest data comes from a survey conducted by the National Association of Realtors.
With home prices rising by double digits over the last year, in high priced markets like San Diego a 20 percent down payment is often over $150,000. Programs that allow for smaller down payments help potential home buyers avoid the stress of scraping up that much cash to purchase a home. In fact, the average down payment for first-time buyers over the last three years ranged between just six and seven percent.
FHA loans are one of the most common ways home buyers bypass the need for large down payments. Loans backed by the Federal Housing Administration allow borrowers to put as little as 3.5 percent down on the purchase of a home.
Today, conventional, conforming no-point 30-year fixed mortgage rates are averaging 3.0 percent and 15-year rates are near 2.25 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.biz, social media (#AramcoReport), or over the phone at (877) 700-0942 and your questions may be featured in an upcoming article.
