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Average Down Payment for First-Time Homebuyers – Bankrate.com

It can be challenging to save the money for a down payment on a house, especially if you’re a first-time homebuyer. The minimum down payment isn’t as much as you think, however. Here’s what to know about the average down payme…….

It can be challenging to save the money for a down payment on a house, especially if you’re a first-time homebuyer. The minimum down payment isn’t as much as you think, however. Here’s what to know about the average down payment for a first-time buyer and what’s needed to qualify.

Average down payment on a house for first-time homebuyers

Many first-time homebuyers mistakenly believe they must put 20 percent down to qualify for a mortgage. Fortunately, that’s not the case.

The average down payment on a house for a first-time homebuyer was 7 percent in 2021, according to the National Association of Realtors. If you’re looking to buy a $300,000 home, you’d need to come up with $21,000 for a 7 percent down payment.

The average down payment for all homebuyers, not just first-timers, was 13 percent.

How to lower your down payment as a first-time buyer

You might be able to make a lower down payment by applying for low- or no-down payment mortgage.

First-time homebuyer loans with low or no down payment

  • Conventional loans: If your credit score is 620 or higher, you could qualify for a conventional loan with as little as 3 percent down.
  • FHA loans: These government-insured loans have more lenient requirements. You might qualify if you can furnish at least 3.5 percent down.
  • VA loans: VA loans are available to active duty servicemembers, veterans and their families for no money down.
  • USDA loans: USDA loans are available to homebuyers in specific rural areas with a lower or average income. If eligible, you can use one of these loans to purchase a home with no money down.

While a lower down payment makes homeownership more accessible, keep in mind that if you put less than 20 percent on a conventional loan (the most popular option) or an FHA loan, you’ll be required to pay for mortgage insurance, which protects the lender if you were to stop making payments. A lower down payment typically also means you won’t qualify for the lowest possible mortgage rate.

First-time homebuyer down payment assistance programs

Many states and local municipalities offer down payment assistance programs for first-time homebuyers, such as:

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