For many first time home buyers, some of the biggest questions about buying their first home, revolve around how much their mortgage will cost. Not necessarily the mortgage itself, but the fees and costs associated with procuring the loan. Closing costs, escrow costs and down payment percentages are usually the biggest costs that borrowers worry about when getting a mortgage. Fortunately, closing costs and escrow costs are detailed in the GFE – a document that estimates the closing costs well before closing.
But the down payment amount is something totally different – something that is decided upon by the borrower, lender and the desired loan type. Some loan types have zero down payment, while others have 3% or even 20% – this makes it hard to calculate an average down payment. Luckily, RealtyTrac, “the nation’s leading source for comprehensive housing data,” just released a report that analyzed sales data for almost 1.5 million mortgage loans.
According to the report, the average down payment amount in 2014 was $32,141.
“This analysis shows that first time home buyers have a better shot at buying a home in low-priced markets, not just because of the lower price point but because on average buyers are putting down just 12 percent in those markets compared to 24 percent in high-priced markets,” said Daren Blomquist, Vice President of RealtyTrac. “Meanwhile, the markets where millennials are moving the most have above-average down payment percentages, which will make it tough for millennial renters to convert into first-time homebuyers in those markets.”
While $32,141 is the national average that home buyers paid for down payments last year, it’s important to know that there is a loan type to accommodate every buyer – and every down payment.