Think You Need a Big Down Payment to Own a Home? Think Again

If you're currently renting in the Triangle, you've likely felt the frustration of watching Raleigh housing market trends while assuming homeownership is years away. The biggest hurdle for most is the "20% down payment" myth. On a $425,000 home (a recent median home price estimate for Wake County, according to Zillow), that's $85,000.

That number alone makes homeownership feel impossible. But here's the reality: Most first-time homebuyers do not put 20% down. In fact, many don't even come close. Understanding the first-time homebuyer programs available in North Carolina can help you move from renting to owning sooner than you think.

The Biggest Myth in Home Buying: The 20% Requirement

The 20% rule is more of a historical relic than a current requirement. According to the National Association of REALTORS® (NAR), the median down payment for first-time homebuyers is actually just 9%.
Depending on your financial profile, you may qualify for even lower entry points:

• 3% Down Payment: Programs like Fannie Mae's HomeReady® Mortgage allow for down payments as low as 3%.
• 3.5% Down: FHA loans remain a top choice for buyers looking for a low barrier to entry.
• 0% Down: Eligible veterans can access VA loans with no down payment requirement.

That means on a $350,000 home, you might put down closer to $31,500, not $70,000. To see how these different percentages affect your specific budget, you can use our mortgage calculators to compare different scenarios.

Why 20% Was Once Common (and Why It Changed)

Historically, putting 20% down was the only way to avoid Private Mortgage Insurance (PMI). While that's still an advantage, today's mortgage rates and specialized loan programs are designed to prioritize accessibility.

At Coastal Credit Union, eligible buyers may even qualify for low- or no-down-payment options, depending on the loan program and financial profile. You can explore those options on the First-Time Homebuyer page.

Renting vs. Owning in Raleigh: What the Numbers Show

With average rents in Raleigh ranging from $1,400–$2,000 for single-family homes, according to recent data from Zillow, many renters are already paying the equivalent of a mortgage. The difference is in the long-term wealth gap. While rent builds equity for a landlord, a mortgage builds equity in an asset you own. You can actually run a side-by-side comparison using our Rent vs. Buy Calculator to see exactly when owning becomes the better financial move for your situation.

You May Be Closer to a Down Payment Than You Think

You don't always have to rely solely on your savings account to buy a house in North Carolina. You can often bridge the gap using:

• Down Payment Assistance (DPA): The North Carolina Housing Finance Agency (NCHFA) offers programs like the NC 1st Home Advantage Down Payment, which can provide significant assistance to eligible buyers.
• Gifted Funds: Many loan programs allow family members to contribute to your down payment.
• Seller Concessions: In the current Raleigh real estate market, some sellers are willing to contribute toward closing costs to help finalize a sale.

What Lenders Actually Look For

While your down payment is important, it's not the only factor in mortgage pre-approval. Lenders evaluate your overall financial health, including:

1. Credit Score: A solid payment history can unlock lower interest rates. If you want to see where you stand, you can check and monitor your score for free using the credit score tool within our digital banking platform.
2. Debt-to-Income (DTI) Ratio: Your monthly income compared to your current debt obligations.
3. Employment History: Lenders look for consistent income stability.

The Real Cost of Waiting to Buy

Many people delay buying because they are "waiting for the market to crash" or trying to hit that 20% savings goal. However, in high-growth areas like Apex, Garner, or Holly Springs, home prices often rise faster than most people can save. Waiting three years to save an extra $15,000 might result in the home price increasing by $30,000 in that same timeframe.

Your First Step: Talk to a Mortgage Professional Early

One of the biggest misconceptions about home buying is that you should wait until you feel "ready" before talking to a lender. In reality, speaking with a mortgage professional early can give you clarity and confidence.

A pre-approval conversation can help you understand:

• What home price range fits your budget
• What down payment options you qualify for
• What steps you can take now to strengthen your application

Ready to start your homeownership journey in North Carolina?

Coastal Credit Union offers guidance, tools, and flexible mortgage options designed specifically for first-time buyers.

👉 Visit the First-Time Homebuyer page to get started