Making the decision to buy a home is not something that you simply decide to do one day. If you’ve chosen to purchase a house, you’ve probably put a lot of thought into the whole process and have been saving up for quite some time to be able to make a down payment. However even if you have been saving up, you could be asking yourself一 what is the right amount of money to spend on my down payment? The answer may surprise you.
Chances are you have been told that in order to purchase a home, you have to have a down payment of 20% or more. The reality is that down payments have not been that high since 2005, when 20% was the median amount of money that people were putting down. According to the National Association of Realtors (NAR), the median down payment that is required from homebuyers today is only 14%, with repeat home buyers sitting at 17% and many first time home buyers only needing to put 6% down! Unless your lender specifies an amount of money that you need to use for your down payment, you could be starting with one of these lower rates, making your home buying dreams an attainable reality.
Is putting 20% down on a home a good idea? Depending on your financial situation, there is nothing wrong with choosing to put down 20% on your home. Just remember that there is nothing saying you have to make that large of a down payment in 2023. If you are concerned that a large down payment will completely drain your savings account, you are better off paying something lower and easier to manage so that you do not face financial trouble down the road. You never know when you may need to dip into your savings for an emergency!
Figuring out how much you should be using for a down payment can seem like an intimidating and overwhelming process no matter if it is the first time or 10th time you’ve purchased a home. To figure out what you can afford to spend on your dream home, use the calculators on the Wisconsin Mortgage Corporation website and get in touch with your WMC loan officer and Shorewest, REALTOR® for the most up to date and helpful information about where to start.
Tags: down payment, saving for a downpayment, Savings
Categories: First Time Home Buyers, Home Buying, Home Selling, Homeowner, Market Updates, Quarterly Newsletter, Real Estate Tips, Shorewest Tips
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