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The Down Payment Hurdle: Clearing the way to Home Ownership

The National Association of Realtors sent out a research paper on aspiring home buyers yesterday. It was full of all sorts on interesting numbers on people’s perceptions of the housing market and their reasons for not currently owning a house.

Non-homeowners cited the main reason they don’t currently own a home is that they can’t afford to buy. In the last quarter of 2016, 55% of non-homeowners cited not being able to afford a house as their top reason for not actually owning one. Makes sense.

In the final quarter of 2016, 87% of non-homeowners stated that they’d like to own a house in the future, either when their lifestyle changes, their financial situation improves, they pick a place to live, or their employment situation is more stable.

What stuck out to me was people’s expectations of what a down payment would be. For my clients, saving up for a down payment and closing costs is the second big hurdle to home ownership (IMHO minding your credit score is the first).

A majority of would-be home owners believe you need more than 10% of your house price as a down payment. That’s not always the case.

If home ownership is in your sights, even if it’s a few years off, I suggest you talk with a lender or three and learn about the array of mortgage products available to you and the unique combination of down payment/monthly payments that suit your financial goals and your situation. You’d be surprised by what’s available .

The mortgage market can be overwhelming but a great lender will be able to help you clear a path straight to your very own front door.

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