As before the 2008 crisis: housing in the US can now be bought with a down payment in 10%

Buying your first home is an important step in the life of every US citizen, often the home is the largest purchase in their life. For decades, people have saved money for many years to set aside the 20-percent down payment that was needed to get a mortgage to buy a home.

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However, today the majority of first installments have decreased and make up only 10 percent of the purchase price of the price of a house or even less, writes GO Banking Rates.

High housing prices in the United States make a large down payment very difficult for buyers. Even with two working people in a family, it is very difficult to set aside 50 000 dollars for a down payment even for a modest house worth 250 000 dollars. Add to this the rental price during the postponement of the down payment, as well as the repayment of student loans and all other expenses of young families, and 20% the first installment becomes almost impossible, which stops many people from buying a house these days.

Why the average down payment for a house has decreased

To make a big down payment when buying a home, you may have to exhaust all your savings and tighten your belts a little. This puts you in a risky situation if you suddenly have a financial emergency. Even the Consumer Protection Bureau warns potential home buyers that it is not worth spending all their monthly savings on a down payment on a mortgage.

For these reasons, the average down payment on a house is now about half of what it was a few decades ago. According to the National Association of Realtors, the average contribution to 2017 was 10% of the purchase price of the house. The average price of housing last year was 235 000 dollars, so the average buyer for the mortgage contributed 23 500 dollars.

Buying a house without a large down payment

Several federal programs can help people buy homes with even lower down payments. For example, if you are buying a home for the first time, you can use a loan from the Federal Housing Administration

(FHA), and the down payment in this case will be just 3,5%. If you are a veteran, you can get a mortgage from the Veterans Administration without a down payment at all.

If you can make a 20 percent down payment, then you will have the option not to pay for private mortgage insurance.

Before the financial crisis of 2008, a similar situation was observed in the US real estate market - Americans could buy houses with a minimum down payment of 10%, which many took advantage of. But when the crisis began, thousands of people were unable to make large monthly mortgage payments due to declining incomes and ended up losing their homes.

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