Are you desperate to own a home of your own?
If that’s your dream, you are likely saving up, dollar by hard-earned dollar, until you have that magic number: 20% of your dream home’s total value. That’s what all the experts say, right?
For the average American home, 20% amounts to a pretty big number. Throw in closing costs and you’ve got a small fortune to raise – and years to go until you reach your goal.
It’s great that you’re putting money away toward what will likely be the largest purchase of your life, but there’s one huge mistake in your calculations: You don’t need to put down 20%.
Yes, you read right. The 20% myth is an unfortunate leftover from the era after the housing crisis, when out of necessity, access to credit tightened up. Thankfully, times have changed, and since FHA loans were introduced more than 80 years ago, mortgages have not required a 20% down payment.