Home Buyers in Washington & Nationwide Put Down Less Than 20%

September 27, 2018
Last updated:
February 7, 2024
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According to a recent report, just over half of all home buyers in Washington State and nationwide make down payments below 20% when buying. This is further evidence to debunk the longstanding myth that home buyers have to put down 20% in order to qualify for a mortgage loan.

More Than Half of Home Buyers Put Down Less Than 20%

According Zillow’s “Consumer Housing Trends Report,” about 60% of home buyers tend to put down less than 20% of a down payment when buying a property. This should come as welcome news for those buyers who think that they have to put down 20% or more to get a loan.

This in-depth report is based on surveys that “gathered information from a total of 10,000 key household decision-makers” in Washington and elsewhere across the nation.

Surveys from the National Association of REALTORS® and other groups have found that there’s a common misconception about the minimum down payment needed to buy a home these days. (It’s a topic we’ve addressed before.) Specifically, a lot of buyers believe they have to put down at least 20%. This belief actually prevents some people from attempting to buy a home in the first place, because they lack the 20% they think is required.

The truth is that an eligible borrower in Washington State can purchase a home with as little as 3% using a conventional loan or 3.5% for an FHA-insured mortgage. And most military folks can qualify for a VA loan that offers 100% financing. There are also special programs designed for people in rural areas with low to moderate income.

So the idea that all home buyers in Washington need a down payment of 20% is false.

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How Mortgage Insurance Aids Borrowers

Granted, if you do make a down payment below 20% you might have to pay for private mortgage insurance (PMI). That’s the threshold where these insurance policies are typically required.

But for a lot of people, this nominal extra cost is worth it because it allows them to buy a home sooner with less money down.

The takeaway message for buyers is that you don’t necessarily need to make a down payment of 20% or more to buy a home in Washington State. You can if you want to, and it would allow you to avoid mortgage insurance. But it’s not a requirement for the average borrower. There are mortgage programs available, on both the conventional and government side, that has a much lower investment requirement.

Related: Buyers don’t need perfect credit

Other Interesting Insights from the Report

This report contained a number of other insights relating to home buyers in Washington and nationwide. Here are some of the highlights:

  • Nearly half of all buyers (45%) in the market today are purchasing their first home.
  • On average, today’s home buyers spend almost four and a half months looking for a property before making an offer.
  • Almost half of all buyers (15%) today end up purchasing a property within the suburbs, while 40% prefer to buy in urban markets. The remaining 33% settle down in rural areas.
  • The majority of buyers (74%) include some kind of contingency within their purchase offers. The home inspection contingency was the most common, followed by the financing contingency. Learn more about common contingencies.

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Have Questions or Need a Home Loan?

Are you looking to make a home purchase and need a home loan to finance it? We’d love to help you. Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We serve the entire state, as well as Oregon, Idaho, California, and Colorado. We have several mortgage programs for you to choose from with flexible eligibility criteria. Please contact us if you have mortgage-related questions.

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