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Expert: put 20% down payment on a home

Experts say the biggest thing holding most people back from buying a home is the down payment.
Published: Mar. 22, 2022 at 12:42 PM EDT
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InvestigateTV - Experts say the biggest thing holding most people back from buying a home is the down payment.

Thirty-six percent of homeowners told Nerdwallet in a recent study not having enough saved for a down payment was the biggest things standing in the way of home ownership.

The general rule of thumb here is a 20 percent down payment, so if you’re buying a $200,000 home, you’d need $40,000.

However, Elizabeth Renter, a data analyst and senior writer at Nerdwallet, said while she recommends 20 percent, there are other options out there.

“While a 20 percent down payment will save you in on the life of your loan and prevent you from having to pay private mortgage insurance, there are mortgage options available that allow you to put less down on a home, so 10 percent, five percent, even three percent,” Renter explained.

FHA loans, for example, may require as little as 3.5-percent down for qualified borrowers and some VA loans may have no-money-down options for qualified veterans, current military service members, and their spouses.

Bottom line, don’t give up, research your options, and talk to a lender.