20% Down Payment is a Lie

Don’t you love the holidays! It is the time when all the family gets together. You get to see all the relatives you haven’t seen in a year or two, and you get to catch up.

I used to dread it. It seemed no matter what progress in life I made, there was always something else that I should be doing. For example, when I was in college, it was; when are you going to graduate, or do you have any job opportunities lined up. These questions just kept being asked in one shape or form. After I started my career, they asked, when are you getting married or buying a house? Those last two questions always sounded like nails on a chalkboard with me. I would smile and walk away.

When I used to think about buying a home, I would think about all the money that I had foolishly spent instead of saving. I could not bring myself to admit to my family that I did not put away a percentage of my paycheck into savings. Sure, I had some money, but not enough for a 20% down payment.

It wasn’t until I had a friend tell me that they were buying a home. I knew their financial situation and was amazed. I thought to myself, if they buy a home, I know definitely can. I talked to them and inquired how they managed it since they did not have the 20% down in their savings. That’s when I found out that the 20% down payment is a myth, and I became a homeowner a few months later.

Property values are increasing so are materials to build them. It is no longer feasible for lenders to expect that future homeowners have a 20% down payment available when they are ready to purchase a house. There are numerous options for mortgage loans for new homeowners that require as low as 3-5% range. If you are a veteran or currently serving, you could qualify for a VA loan with NO down payment.

With this news, you are now really considering buying a home because it is within your reach. Buying a home will be the most significant investment that you may ever make. Since you are not putting the 20% down, you will have to pay a PMI (private mortgage insurance). 

PMI is known as lender insurance. It protects the lenders if the loan goes into default or if the property forecloses. Do not let the PMI stop you. It is low and built into your mortgage payment. If you are worried about it, you can always refinance your mortgage loan after the 20% down payment is made or your property value increases.

Now you are worry-free to buy a home since you know the 20% down payment is a myth. Make sure that you know your budget; and when you start looking at houses that are in your price range. Once you are 100% sure you are buying a home, evaluate multiple mortgage lenders and get pre-qualified. Then all you have to do is go to the Miller Family Home’s website and pick out a home, and we build it for you! Simple as that!