Saving for a down payment may be easier than you think

According to the National Association of Realtors, the most difficult step in the homebuying process is saving for a down payment. HouseLogic.com, which is NAR’s site for homeowners, recently reported that the 20 percent down payment requirement is “one of the biggest misconceptions in home buying.” Misconception, schmichconception. Saving for a down payment is not that difficult to accomplish.

Let’s begin with the 20% misconception. The average down payment for first-time homebuyers in 2021 was 12 percent of the purchase price, according to NAR. The average down payment amount for first-time buyers was 6 percent. Just over one-third of all buyers purchased using an FHA loan, which requires a 3.5 percent down payment. The Veteran’s Administration and USDA both offer zero-down loans, while the New Mexico Mortgage Finance Authority offers programs for low and moderate-income buyers that require a minimum cash investment of just $500.

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