The 20 Percent Down Myth


In my consultations with buyers every week, I am surprised by how many of them think that they need to have saved up 20 percent of the purchase price, plus closing costs, to buy a home.

That can lead to years of savings for a lot of people. And let’s face it … EVERYTHING is so much more  expensive these days. It also can lead to years of throwing money away in rent, and foregoing the tax     benefits that go along with home ownership.

“I’ll just rent for a couple of years,” can be a costly proposition. A $1,400 monthly rental payment would tally $33,600 in just two years. Tack on the lost tax benefits, and potential appreciation, and there’s a lot of money left in someone else’s pocket.

There are quality loan products out there with as little as zero to 3 percent down.

RealtyTrac, a real-estate data provider, recently did a joint study that found there are 2,290 down payment assistance programs across the country. The average amount of assistance per buyer is $11,565, the study found.

More than 68 million of the 78 million single-family homes and condos in the United States … 87 percent … would qualify for a            down-payment program, according to the study.

Many buyers also put off buying a home because they think their credit score isn’t high enough. There is a perception that you need great credit to be in the game. There are plenty of programs out there starting in the 620 to 640 FICO range as a minimum middle credit score.

Some of the programs include:

· VA Home loans. A 100-percent loan with no down payment required.

· USDA Rural Development Loans. Property must be in an eligible area under this federal program. Most of Santa Rosa County      qualifies.

· FHA Home Loan. 96.5 % financing. No income limits like USDA. Maximum loan amounts are set by county.

· Conforming/Conventional Home Loans. Up to 95-percent financing.

· Lender credits. Lenders can assist with money toward your closing costs.

Interest rates are still at historic lows, so this is a great time to buy. Even small increases in the interest rate may decrease your home   purchasing power considerably.

If you’re thinking about buying a home anywhere in America and are curious about these programs, I’d be happy to do a free consultation with you. Call or text me at 850-982-2039 or visit us at



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