Owning your own home may be a cornerstone of the American Dream, but it’s a dream deferred for many people. Rising home prices – up 6.3% over the last year — are making it difficult for many would-be buyers to save enough for a 20% down payment.
Nearly 30% of renters Bankrate surveyed said they were still writing monthly checks to their landlord because they couldn’t afford a down payment to buy a home of their own. Those hesitant buyers would need to come up with nearly $50,000 to put down 20% on a property that cost $240,700, the median selling price for homes in the U.S. in the second quarter of 2016.
Frustrated renters may wonder how buyers are able to come up with hefty down payments for their first place. Well, chances are, they’re not. Though some first-time homeowners are diligent savers who can come up with a sizable down payment, many buyers put way less than 20% down.
The average down payment was 13% in July 2016, MarketWatch reported. While personal finance experts often recommend a large down payment, since it gives you instant equity in your home, means a smaller monthly payment, and allows you to avoid mortgage insurance, there are plenty of paths to home ownership that don’t involve writing a huge check to your lender right off the bat. That’s good news for buyers, especially those in expensive areas where saving $50,000 or more for a home may seem like an impossible hurdle. From FHA loans to down payment grants, here are six ways to buy a home, even if you don’t have a lot of money in savings.