The Case for the 10% Down Payment

  • June 08, 2017

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One of the most common misconceptions home buyers face is the iron clad 20% down payment.  There are many flexible mortgage financing programs available that do not require a 20% down payment.  Bank of America CEO Brian Moynihan offered his thoughts on the 20% down payment in an interview with CNBC.

New home buyers, especially millennials with substantial college debt, are struggling to save for the 20% down payment.  First time home buyers are a driving force for the housing market, and many are delaying homeownership because of the down payment obstacle. Moynihan posited, “If you require a 20% down payment, it takes just a little bit more time to accumulate 3% or none.” 

Down payment assistance and low down payment programs exist to facilitate homeownership across all income and credit profiles.  Moynihan suggests that imposing a 10% down payment as an industry standard may spur the market and enable more millennials to borrow. 

Before purchasing a home, the potential buyer should consult a qualified loan officer to review down payment assistance and low down payment programs.

 

Sources: HousingWire

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