Larisa Cockerham, Realtor

What's the average down payment on a house?

If you thought 20%, that’s a common perception and putting more down could lower or eliminate your PMI (We will talk about this in more detail below).

BUT, 20% being the average is far from the truth.
In 2021, the National Association of Realtors found the average down payment on a house/condo was just 12%.

For home buyers aged 30 and under (often First Time Homebuyers), that number drops to 6%.

So how much do you need to put down? It varies based on loan type.

•0% down payment: No money down mortgages include VA
loans (for veterans, service members, and some surviving spouses) and USDA loans.
• 3% down payment: The conventional 97 loan, as well as the HomeReady mortgage from Fannie Mae and Home Possible mortgage from Freddie Mac, allow just 3% down payment
•3.5% down payment: The FHA loan allows 3.5% down payment and has lower credit score requirements than Fannie Mae or Freddie Mac loans. Borrowers can qualify with scores starting at 580.
•Private loan programs: Some lenders offer 3%-down loans that require no ongoing private mortgage insurance payments.

What is PMI? And what does that mean for me as a buyer putting down less than 20%?

PMI = private mortgage insurance

When borrowers put down less than 20% on a mortgage loan, they're usually required to pay for mortgage insurance.

That means most people making an average down payment of 6-12% will be paying this extra monthly charge.

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Larisa Cockerham, REALTOR®
Coldwell Banker One
(225) 846-1352
[email protected]
www.SOLDBUYLARISA.com