The Truth About Down Payments

Freddie Mac recent article on down payments. “With interest rates low (though rising), more credit available to qualified borrowers, and employment up, it’s a good time to buy a home if you are financially ready and able. But many potential homebuyers see the down payment as a hurdle too high to jump. It might be lower than they think, however, and they might be eligible for a financial boost.”

A survey conducted by Wells Fargo Home Mortgage and Ipsos Public Affairs found that 36 percent of respondents believe a 20 percent down payment is required to purchase a home. Not so.

In fact, the average down payment for single-family homes bought in the first quarter of this year was 14.8 percent, down from 15.5 percent a year ago, according to RealtyTrac. About 40 percent of homebuyers put down less than 10 percent. Freddie Mac has long allowed for 5 percent down, and our Home Possible AdvantageSM mortgage is available to qualified borrowers with as little as 3 percent down, which can even be raised by a gift from a family member or employer or a grant from a government agency.

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