Georgia residents may believe that they need to put 20 percent down to buy a house. However, there are loan options available that allow a person to buy a home with a lower down payment. According to a U.S. Mortgage Insurers study, the median down payment in 2017 was only 10 percent. The Realtors Confidence Index Survey from November 2017 found that 61 percent of first-time buyers made a down payment of 6 percent or less.
In some cases, it may be possible to obtain assistance that will help reduce a down payment or help with other closing costs. Sellers' concessions may also make it easier to qualify for a home loan with less money needed upfront. Those who do choose to pay less than 20 percent down will have to account for private mortgage insurance. It provides financial protection to lenders in the event a borrower defaults.
If a person does choose to make a 20 percent down payment, it can be difficult. On average, an American will spend 20 years saving enough money to make a 20 percent down payment on a home valued at $235,500. This assumes that he or she makes the national median income. However, those in California will take 37 years to reach this goal while Hawaii residents will take 34 years.
When purchasing residential property, a buyer will need to pay attention to detail. For example, it may be necessary to understand the down payment requirements a lender imposes or find out if there are prepayment penalties associated with various loan products. An attorney can often review the terms of a loan to ensure that buyers understand their responsibilities prior to agreeing to it.