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Summary: A down payment is needed to secure a mortgage to purchase a home. But down payment amounts can range a great deal, anywhere from 3% to 20% or more. There are even some zero down payment options available. The question is, how much of a down payment do Washington home buyers put down? This article will answer that question.
A recent report showed that about one-third of home buyers in Washington State made down payments of 3.5% or less. A slightly higher percentage put down 20% or more. The rest fell somewhere in between.
Pop quiz: What is the median down payment among purchase loans? Like a lot of folks, you might think it’s somewhere near 20%. Actually, home buyers nationwide who purchase a property put a median of just 5% down.
And according to an interactive map created by the Urban Institute (a Washington, D.C.-based research group), 33% of home buyers who use a mortgage loan to buy a house make a down payment of 3.5% or less.
These statistics provide further evidence to debunk the widespread misconception that all home buyers need to put 20% down when buying a home.
The Urban Institute, an economic think tank based in the nation’s capital, provides an interactive map tool that gives insight into a variety of home buying and mortgage trends. Among other things, it allows users to research the share of home loans for different down-payment sizes.
Using this tool, we discovered that about 33% of home buyers in Washington State make down payments of 3.5% or less. That’s roughly one-third of all purchase loans.
These days, there plenty of options available for borrowers seeking a down payment in the 3% range. That’s good news for buyers who may not be able to come up with a large lump sum of money to secure a mortgage, especially in very expensive real estate markets like Seattle and other centers in King County.
FHA loans used to be one of the only ways to accomplish that goal. Today, however, conventional loan programs offer down payments in that range as well (thanks to policy changes made by Freddie Mac and Fannie Mae).
While putting down as little as 3.5% is a popular option among buyers in Washington (which makes it easier to get into the housing market with fewer funds available), putting a lot more than that is also common among many buyers.
There are a couple of key reasons why some buyers choose to put a much larger amount of money as a down payment.
But many home buyers in Washington can’t afford to put down 20% on a home purchase. Thankfully, there are programs available that require a much smaller investment from the borrower.
Related: PMI helps thousands of borrowers
Do you have questions about down payment options and mortgages in Washington? If so, we’d love to help. Sammamish Mortgage has been helping home buyers and homeowners across the state of Washington since 1992. We offer many mortgage programs to borrowers all across Washington, Oregon, Idaho, and Colorado. Please contact us if you have financing questions, or if you’d like to get an estimate for your next home loan.
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