There may be some new mortgage products that only require a 3% downpayment. If you are a first-time homebuyer ask your lender.
There are almost always special programs available for first-time homebuyers. They are ever-changing and your Boston real estate agent usually isn’t up to date on all of the programs but most of us know mortgage lenders who are. (Like me..hint, hint)
With an FHA loan, a 3.5% down payment is required and with a conventional loan, buyers need to have at least 5% of the loan amount as a down payment. A 5% downpayment means coming up with about $8,500 dollars to buy a median-priced house of about $166K in St. Paul, whereas a 3% down is closer to $5000.
There are some down payment assistance programs but most homebuyers will need some cash to buy a home. People who already own home often use the proceeds from the sale of that home for a down payment.
For those who are planning on buying that first home in 2021 now is a great time to start shopping for a mortgage.