Economists agree that the real estate business has recovered faster than expected during the pandemic. A continued lack of inventory, low mortgage rates, and pent-up demand are all contributing factors to a robust market.
The good news for homebuyers is that down payment assistance is still available, with many program providers offering online and virtual support/education. With an average benefit of $13,000, these programs can help make the difference in achieving homeownership when competition is fierce.
Many prospective buyers are unaware of the scope of these resources or don’t think they’ll qualify. Our goal is to dispel several of the most common myths surrounding these programs:
- Myth #1 – They’re only for first time buyers: Over a third of the programs don’t have a first-time homebuyer requirement. Further, previous homeowners who haven’t owned a home for at least 3 years can qualify as first-time buyers.
- Myth #2 – A 20% down payment is always better: Many of the programs offer a variety of down payment options which can keep prospective borrowers from draining their savings accounts, thus giving them more liquidity to handle the many unexpected costs that come with home ownership. In fact, a study by JP Morgan Chase showed that borrowers with at least 3 mortgage payment equivalents of liquidity had lower default rates than those who had more equity, but less liquidity.
- Myth #3 – Buyers using down payment programs are considered less appealing: Industry professionals well-versed in these programs say that it can be just the opposite, since several of these programs cover closing costs – fees that prospective buyers often asks sellers to cover. Also, since nearly all down payment programs require homebuyer education, these buyers are more knowledgeable about the process and expenses surrounding homeownership.
Your Home, Your Investment
