Top 5 Sources of Down Payment Money - What Are Ann Arbor Buyers Using?
According to the 2007 Profile of Home Buyers and Sellers from National Association of Realtors, the top five sources of down payment money follows:
1. Savings 2. Proceeds from the sale of a primary residence 3. Gift from Relatives or Friends 4. Sale from Stocks or Bonds 5. Equity from Residence (continue to own)
I was surprised to learn that 73% of first time buyers are using money they had saved to come up with their down payment on a home. We see many of our clients as first time home buyers as a result of attending the seminars.
Per the study, 43% of repeat buyers will use money from savings to at least help partially cover the down payment of their new home. Many people get proceeds from sale of primary residence.
For more information on what how you can buy a home, go to the buyer section for Special Reports and see the Home Buyer Steps. Also be sure to check when our next First Time Home Buyer Seminar is with free pre-approval. If you need to get your credit under control, let our lenders help you step by step, like fitness training for your wallet.
Nationally the median down payment by first-time buyers was 4 percent, up from 2 percent in 2007; the number purchasing with no money down fell from 45 percent in 2007 to 34 percent in the current survey. “The study covers transactions through the middle of 2008, so we can assume the down payment numbers have shifted recently because credit tightened and no-down payment loans all but disappeared around the close of the survey,” Lawrence Yun, Chief NAR economist, explained.
Of first-time buyers who made a down payment, 69 percent used savings and 26 percent received a gift from a friend or relative, typically from their parents. Another 7 percent received a loan from a relative or friend, while 16 percent tapped into a 401(k) fund, stocks or bonds. Ninety-two percent chose a fixed-rate mortgage.
Remember to tell any one looking to buy a home about our…
- ann arbor homes
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