Raymond Denton

NMLS# 251483

Loan Officer / HECM Specialist

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Debunked: 5 down payment myths you probably still believe
By Academy Mortgage Corp.

More than 200 million Americans live in homes they own themselves, according to the U.S. Census Bureau. Still, despite the large percentage of the population that has successfully gone through the homebuying process, it remains a mystery to many citizens. For those considering a home purchase this year, myths about what is necessary to buy a home may keep them from joining the 64 percent of the country who live in owner-occupied houses.

Here are 5 down payment myths you probably still believe, but shouldn't:

Myth No. 5: I need a 20% down payment.

Many people have heard that a 20% down payment - at minimum - is required to obtain a residential mortgage. This myth became popular because it's generally recommended that most people have a 20% down payment ready when they wish to buy a home. However, that doesn't mean it's necessary. In fact, the typical down payment today is between 5 and 10%, according to SmartAsset.

Myth No. 4: My down payment has to be all my own money.

For many people, the most challenging aspect of buying a home is saving for the down payment, according to the National Association of Realtors. While the majority of people use their own money for the down payment, this is hardly required. Freddie Mac pointed out that there are several options for those saving up for a home, including:

Myth No. 3: Down payment assistance programs are only for first-timers.

Down payment assistance programs can be a wonderful help to first-time homebuyers who are new to the world of real estate. But, as any second-time homebuyer may tell you, it's not always smooth sailing on your second go-round.

This is particularly true for those who haven't gone through the homebuying process in several years. And, considering the average time spent in a home is a decade, it seems safe to say that most home sellers are out of practice when it comes to navigating a home purchase.

Because of this, the definition of "first-time homebuyer" is a bit more complicated than one might assume. According to the U.S. Department of Housing and Urban Development, a first-time homebuyer is someone who:

Beyond these many definitions, it's important to note that not all down payment assistance programs specify that they're only available to first-timers.

Myth No. 2: Programs are only available in big cities.

Down payment and homebuyer assistance programs are available in every corner of the country. Every homebuyer, whether they're living in a big, bustling city like Los Angeles or New York City, or in a tiny, rural community, has access to a program that can simplify the homebuying journey. To find one for you, begin by browsing through the state housing agency loans available through Academy Mortgage.

Myth No. 1: Down payments are always required.

Not every home purchase is secured with a down payment. Crazy as it sounds (especially if you believed you needed as much as 20%), some homes can be bought with no cash down. Here are two popular 100% financing options you can look into:

VA Loans

If you or your spouse is a veteran, an active-duty service member or a part of a reserve program, you could qualify for a VA loan, and may not be required to make a down payment upfront.

USDA Loans

Also called farmers' or rural loans, the U.S. Department of Agriculture backs these loans which encourage buyers to make a home purchase in qualifying areas of the country. While their name suggests that it only applies to far-away plains, it actually encompasses some surprisingly suburban areas. While you won't find a qualifying home in the center of a major metropolitan area, you'll likely find one within driving distance. Check out the USDA website to explore eligible areas.

Academy Mortgage is one of the top independent purchase lenders in the country as ranked in the 2015 CoreLogic Marketrac Report. Visit www.academymortgage.com to find a loan, get a rate, or calculate your payment today.

NMLS# 251483

State Lic: CA: CA-DBO251483;

Corp Lic: CA: 4170013;

Licensed by the Department of Business Oversight Under the California Residential Mortgage Lending Act;