Is a 20% Downpayment Required to Buy a Home?

It is a common misconception that to buy a home, a prospective buyer needs to have a downpayment of at least 20% of the purchase price.

While there are definitely benefits to making a large downpayment, it can be very challenging to come up with that kind of money, especially if you are a First-Time Home Buyer. And in more expensive housing markets, such as here in the Pacific Northwest, that challenge is even greater.

In Yamhill County, Oregon, where I live, for the first two months of 2024, the average and median sold prices for residential properties were $513,500 and $434,500, respectively. For the sake of discussion (and easy math), let’s say the typical home is somewhere in the neighborhood of $450,000.

A 20% downpayment would equate to $90,000. Even if someone scrimped and saved $2,000 per month, starting from scratch, it would take nearly 4 years to come up with that much money.

Fortunately, a 20% down is rarely required for a primary residence.

In fact the average down payment for a home is probably much less than what you might have thought. For First Time Homebuyers, the median downpayment is only 8%.

The big takeaway?

You may not need to save as much as you originally thought.

Learn About Resources That Can Help You Toward Your Goal

According to Down Payment Resource, there are also over 2,000 homebuyer assistance programs in the U.S., and many of them are intended to help with down payments.

Plus, there are loan options that can help too. For example, FHA loans offer down payments as low as 3.5%, while VA and USDA loans have no down payment requirements for qualified applicants.

With so many resources available to help with your down payment, the best way to find what you qualify for is to consult with a a loan officer. We would be happy to connect you with some of the best.

Don’t let the misconception that you have to have 20% saved up hold you back. If you’re ready to become a homeowner, lean on the professionals to find resources that can help you make your dreams a reality. If you put your plans on hold until you’ve saved up 20%, it may actually cost you more in the long run. 

Bottom Line - You don't always need a 20% down payment to buy a home.

If you're looking to make a move this year, we invite you to reach out to us to start the conversation about your home buying goals.