The Truth About Down Payments

Are you a first-time Kansas City homebuyer? It can be intimidating to consider saving up for all the costs involved, especially when it comes to the down payment. You may have heard that putting down 20% of the home's price is necessary, but this isn't always true.

Unless specified by your loan type or Kansas City lender, it's generally not required to put 20% down. You might be closer to your dream of buying a home than you realize!

As The Mortgage Reports says:

"Although putting down 20% to avoid mortgage insurance is wise if affordable, it's a myth that this is always necessary. In fact, most people opt for a much lower down payment."

The median down payment hasn't been over 20% since 2005, according to the National Association of Realtors (NAR). It's only 15% for current Kansas City homebuyers and even lower for first-time homebuyers at just 8% (see graph below):

The big takeaway? As you search for your first home in the Kansas City area, you may not need to save as much as you initially thought.

Resources That Can Help You Reach Your Goal

According to Down Payment Resource, over 2,000 homebuyer assistance programs exist in the U.S. - many are designed to help with down payments. Additionally, there are both national and local loan options for first-time homebuyers. For example, FHA loans offer down payments as low as 3.5%, while VA and USDA loans have no down payment requirements for qualified Kansas City applicants.

With so many resources available to help with your down payment, consulting with a Kansas City loan officer or broker is the best way to find out what you qualify for. These professionals know about local grants and loan programs to assist you in your homebuying journey. Need help figuring out where to start? The Just Say Home real estate experts are well-connected in the Kansas City area and can connect you with a trusted lender.

Don't let the belief that you have to have 20% saved hold you back from buying a home. Are you ready to become a KC homeowner? Lean on the Just Say Home Team. These dedicated and experienced real estate agents will help you find resources to make your dreams a reality. Putting your plans on hold until you've saved up 20% could cost you in the long term. According to U.S. Bank:

". . . there are plenty of reasons why it might not be possible. For some, waiting to save up 20% for a down payment may "cost" too much time. While you're saving for your down payment and paying rent, the price of your future home may go up."

You can expect national home prices to keep appreciating over the next five years. This housing market trend means your future home will likely increase in price the longer you wait. Using these down payment resources to buy now will help you build equity through future price growth instead of costing you down the road.

Bottom Line

Remember: a 20% down payment isn't always a requirement to buy a home in the Kansas City area. Are you looking to make a move this year? Start the conversation with a Just Say Home KC real estate expert about your homebuying goals and make your dreams a reality!

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