Down Payment Required
Studies show many would be home buyers don’t take the plunge for a variety of reasons, not the least of which is the amount of down payment required. So by a show of hands, how many think the requirement is 20%?
Congratulations, you’re in the majority.
Mortgage Insurance Required Above 80% LTV
Though in existence since the late 1800’s, it wasn’t until the 1950’s that mortgage insurance as we know it came into use. Designed to minimize the lender’s risk, mortgages that are more than 80% of a home’s value require it. Thus the reason many think 20% is the down payment requirement, it’s not.
Low Down Payment Programs
In fact, the majority of owner occupant loan programs require less than 5% down (Conventional). FHA only requires 3.5% down where VA/USDA loans require 0% for a down payment!
Closing Costs and Prepaids
In addition, ALL loans will have closing (title, origination, etc) and prepaid costs (taxes, hazard insurance, interest and other expenses), usually totaling 2% – 3% of the loan amount.
How Much Will YOU Need
Doing the math, a qualified borrower will need anywhere from 2% – 8% of the purchase price to cover the down payment, closing costs and prepaid items discussed, or up to $8,000 on every $100,000.
Down Payment Assistance
With many programs that offer to help with down payment and closing costs up to 4% of the purchase price, the truth is many borrowers will have the ability to buy a home with as little as zero out of pocket costs!
Visit this link to see what down payment assistance you may qualify for! http://bit.ly/2oEm058
So what are you waiting for?! Contact your favorite real estate professional for a no cost, no obligation consultation today!