Some people may be discouraged from trying to purchase a home by the fallacy that a down
payment must be at least 20%.

Finding 20% of a home's purchase price can be challenging, but it can be a wonderful way to cut
your mortgage payment and show sellers that you're serious about buying.

Here are some other options:

A smaller deposit is okay. If you have good credit and a regular job, lenders will frequently
accept much less because they are aware that the mythical 20 percent guideline is untrue.

A study on prospective homebuyers by the National Association of REALTORS® found that the
typical down payment in 2016 was 11%. The typical down payment for borrowers under 35 was
little under 8%. Loans for buyers under 35 were most frequently given to those who put down
less than 5 percent, or roughly $3,500. But, putting down 10% can enable you to qualify for a
loan with a lower credit score—in certain cases as low as 500 for an FHA loan.

It is typical to see 3 percent. A few government organizations only need about 3 percent of the
total. While the FHA mortgage, which is aimed at first-time buyers, asks for 3.5 percent down,
loan programs backed by Fannie Mae and Freddie Mac require 3 percent. The down payment on
an FHA mortgage can come from a gift of money or from a program that is authorized to provide
down payment assistance.

Non-borrowing household members may contribute toward qualifying income under the Fannie
Mae HomeReady program. Hence, if you live with an aunt or roommate, you can use their
income to determine whether you qualify for a mortgage.

Perfect credit is not necessary for the programs. Although consumers with a 639 credit score can
still be approved, the average FICO score was 713.

Individuals with a 639 FICO score can still purchase a home, but they may need to boost their
down payment to 5% if they are ineligible for such programs.

Options exist with no down payment. Most lenders provide VA mortgages, which have no down
payment requirements for active-duty and retired military personnel.

Private mortgage insurance, or PMI, is required for some loans with less than 20% down
payment; however, VA loans are exempt from this need.

Moreover, down payments are waived for USDA housing loans. The U.S. Department of
Agriculture is backing these loans, which are for single-family houses in less populated areas of
the nation rather than farms.

There are piggyback loans available. These two mortgages, which call for a 5 to 10 percent down
payment, are most suitable for borrowers with excellent credit. The first mortgage covers 80% of
the cost, and the second one is for 10%; the remaining 10% is a down payment. This does away
with the requirement for mortgage insurance.

There are additional support options available. Government agencies and charity organizations
manage down payment assistance programs, or DPAs. In order to boost homeownership, they
provide presents or interest-free loans. A DPA of some type is available for over 90% of all
single-family houses in the US.

The use of DPA money as a down payment is permitted for all of the significant loan types
mentioned above. Finding DPAs in your area should be possible with the help of your lender.
based on data from BHHS.com, rismedia, and my personal expertise.