Fair Housing Month: Finding Ways To Make Homeownership Less Costly

Associated Press

08-04-2025

Down payments and closing costs. Both typically involve large numbers that can cause doubt to creep into the minds of homebuyers and add to the rising costs of purchasing a home. In fact, KeyBank's 2025 Financial Mobility Survey found that many believe owning a home is not an attainable goal for themselves nor the average American. Survey respondents also said financial education can help them be more confident in the home-buying process.
This Fair Housing Month, we're highlighting ways to make homeownership more accessible and sustainable for all. While the market for homeownership in America remains tricky to navigate, your bank can be a helpful resource when it comes to down payments and closing costs.
Down Payments
Conventional wisdom says it's best to make a 20 percent down payment when you buy your home. While this can help you lock in better interest rates and lower your monthly payment, you need to consider your individual financial situation and needs. Some strategies that can help lower your down payment include:
Consider Homes that are Priced Below Your Budget: Even if you're pre-qualified for a specific loan amount, you may find that a lower home price gives you breathing room month to month. For long-term homeownership success, consider not only your down payment, but your monthly payments, property taxes, homeowners' insurance, and closing costs — which can amount to approximately 2–5 percent of the purchase price of your home. Smaller down payments may require you to get private mortgage insurance (PMI), which would increase your total regular mortgage payments.
Going under budget gives you flexibility for home repairs or other financial emergencies. Many experts recommend saving between approximately 1 and 3 percent of your home's value each year for routine maintenance.
Time It Right: The homebuying process can take time— if possible, begin to prepare months in advance from when you want to move in. If you know you're going to apply for a mortgage within the next few months, forgo opening new lines of credit, whether via a credit card or loan. This can negatively impact your credit score, which can increase interest rates and, ultimately, how much you'll need to spend.
Know Your Loan Options: Many banks and financial institutions offer loans with low or no down payment. KeyBank's Key Community Mortgage lets buyers of owner occupied properties take advantage of low and no down payment options, making qualifying easier than you might think.
Closing Costs
Closing costs are a necessary part of the homebuying process, but they don't have to be a stumbling block to purchasing your dream home. Ways to reduce closing costs include:
Talk to the seller: If a seller is looking to sell their home faster, they may also be willing to cover the closing costs. Doing so could be mutually beneficial, as there are specific tax benefits that the seller may be able to take part in. A seller may also be willing to cover closing costs if you pay full price for a home or if you purchase the house as-is, without requesting any specific fixes.
Shop around: For some of the items on that laundry list of fees, you can shop around to find your own best price. These include the home inspection, title search, homeowners' insurance, and — depending on certain factors including your state laws — title insurance. You'll receive a list of approved vendors from your lender, but you can choose others that meet the lender's criteria.
Finance the fees: Another potential way to reduce the closing costs that you'll pay upfront is to roll some of them into your mortgage loan amount so that you pay them over time instead. Some lenders provide this option through special programs targeting first-time homebuyers as well as those who are refinancing a home. Depending on your lender, expenses eligible for a rollover may include origination fees, credit report fees, appraisals, title insurance, courier fees, and other administrative costs.
KeyBank Mortgage Loan Officers are great resources and can help you navigate the homebuying process. They have information on home lending opportunities and programs to help you get started on the journey to homeownership. Also, KeyBank's Mortgage Affordability Calculator can help you figure out a comfortable loan and payment amount. Don't forget to consider all the parts of a mortgage loan – down payment, principal, interest, property taxes, homeowners insurance and possible PMI.
Our professionals at KeyBank are here to support you at every step of your homebuying journey, from planning to celebrating your success.
About the KeyBank 2025 Financial Mobility Survey: This survey was conducted online by Schmidt Market Research in September 2024, polling 1,000 Americans, ages 18 – 70, with sole or shared responsibility for household financial decisions, who own a checking or savings account. The survey sought to gain insight into financial resiliency and explored respondents' spending and savings habits, levels of financial confidence and financial resiliency, economic sentiment, and impacts of societal trends and pressures over the prior year.
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