The Case for the 10% Down Payment
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.