Finance all of it, part of it, or none of it. Whichever you choose, you’ve got plenty of company.
The National Association of Realtors reports these trends:
Age: Buyers age 45 to 65 and older are less likely to finance a home purchase. They are often repeat buyers or are downsizing.
Average buyer: The typical buyer tends to finance 91 percent of their home purchase.
First-time buyers: They are usually younger and don’t have cash from a previous home. Last year, the average first-time buyer financed 98 percent of their home. Nationwide, 40 percent financed the entire amount.
Sources of downpayment: Savings are the chief source of downpayment funds for home buyers in general and for 73 percent of first-time buyers. About 40 percent of repeat buyers drew on savings for a downpayment, while 60 percent of repeat buyers used the proceeds from the sale of a primary residence for a downpayment.
After savings, the second most popular sources of funds for first-time buyers was a gift from relatives or friends.
Types of mortgages:Â Loosely defined, mortgages are either fixed-rate or adjustable. Within these categories, however, specific terms vary widely.
About 71 percent of recent home buyers reported that they had a fixed-rate loan; 8 percent had an adjustable rate loan. First-time buyers were more likely than repeat buyers to start with a fixed rate loan that eventually had rates adjusted.
Some buyers start with an adjustable rate and then convert to a fixed-rate mortgage. Others begin with a fixed-rate mortgage that then adjusts the rate periodically.
Surprisingly, 3 percent of home buyers don’t know what type of mortgage they have.