Mortgage Blog

As you set out to buy a home, saving for a down payment is likely top of mind. But you may still have questions about the process, including how much to save and where to start.

If that sounds like you, your down payment could be more in reach than you originally thought. Here’s why.

The 20% Down Payment Myth

If you believe you have to put 20% down on a home, you may have based your goal on a common misconception. Freddie Mac explains:

“. . . nearly a third of prospective homebuyers think they need a down payment of 20% or more to buy a home. This myth remains one of the largest perceived barriers to achieving homeownership.”

Unless it’s specified by your loan type or lender, it’s typically not required to put 20% down. According to the latest Profile of Home Buyers and Sellers from the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. There are even default insured loans with a down payments as low as 5%, as well as options with zero-down payment for qualified applicants.

This is good news for you because it means you could be closer to your homebuying dream than you realize. For more information, turn to a trusted mortgage professional.

Smart Ways to Come Up With a Down Payment Can Be a Game Changer

A professional will be able to show you other options that could help you get closer to your down payment goal. If you’re looking to buy a second home, then your best path to a downpayment is often to refinance your existing home. However, other ways to source a downpayment include: a financial gift, RRSP, early inheritence, TFSA/investments, and selling assets.

Knowing the right programs that are suitable to your situation can immediately build your home buying power and help you take action sooner than you thought possible.

Bottom Line

Saving for your down payment is an important first step on your homebuying journey. Let’s connect today and make sure you have a trusted mortgage agent to help explore your options.