One of the biggest obstacles people face purchasing a new home is the down payment. It’s not that people can’t save, it’s the amount they need to save to buy a home here in Eastern Massachusetts. Prices are high, and therefore the down payments tend to be higher because down payments are a percentage of the home price.
Most people think that you need 20% to purchase a home, but that couldn’t be furthest from the truth. In fact, most mortgages require as little as a 3-3.5% down payment. The more you put down, the better the terms. 5% is better than 3%, 10% is better than 5%, and so on. So that’s why you hear about 20% down being required, because that’s when it’s the best terms. However, if everyone waited for 20% down, we would not have over 60% of the population homeowners. It’s just not realistic.
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