Lower Down Payment Options May Appeal to Young Buyers
Lower down payment options are available for interested homeowners and certain regions of the country offer notably lower down payment options due to more affordable housing markets. Knowing where to find more economical housing can help those who have interest in homeownership reach their goals.
Low down payments available in certain counties
According to RealtyTrac's recent report, a number of regions have lower down payment options for standard loans that dip below 20 percent. the average down payment on homes located in the cities with the lowest median home sales price averaged $8,239. this equated to approximately 12 percent of the total value of the property.
The city of Cumberland, North Carolina had an average down payment of 9 percent, while Montgomery, Tennessee and Prince William, Virginia had average down payments of 11 percent of the total value of the purchased home. In addition, Columbia, Georgia, Polk, Iowa and Pulaski, Arkansas all had average down payments of 12 percent.
Younger buyers may find more affordable housing markets appealing
Individuals interested in purchasing their first homes might be able to get more bang for their buck if they turn to regions that do not require such high down payments to acquire real estate. Additionally, lower down payment options serve as a good indicator of the overall affordability of homes in the area.
"This analysis shows that first-time homebuyers have a better shot at buying a home in low-priced markets, not just because of the lower price point but because on average, buyers are putting down just 12% in those markets compared to 24% in high-priced markets," said RealtyTrac's vice president, Daren Blomquist.
In addition, Inman noted that those who borrow money to purchase a home might put a higher down payment on a house not only due to the more expensive real estate market, but also because they want to avoid paying private mortgage insurance.