We have recently reported on the misconception that many buyers have regarding the down payment necessary to purchase a home. Multiple studies reveal that 40-50% of Americans believe you need between 15-20% of a down payment to be eligible to purchase a home. This misconception came about as the government just last year debated new guidelines for residential mortgages because of the housing collapse in 2007. Some were arguing that there should be a minimum of 20% or even 30% down payment on all mortgage loans. However, those standards were never implemented. To counter this misunderstanding, Christina Boyle, Freddie Mac’s VP and Head of Single-Family Sales & Relationship Management, in a recent Executive Perspectives explained that a person “can get a conforming, conventional mortgage with a down payment of as little as 5 percent”.
3% Down Payments Available Soon?
Just last week, Federal Housing Finance Agency Director Mel Watt announced that mortgages requiring only a three percent down payment may soon be available:
“To increase access for creditworthy but lower-wealth borrowers, FHFA is also working with the Enterprises to develop sensible and responsible guidelines for mortgages with loan-to-value ratios between 95 and 97 percent. Through these revised guidelines, we believe that the Enterprises will be able to responsibly serve a targeted segment of creditworthy borrowers with lower-down payment mortgages by taking into account “compensating factors.”
If you are saving for either your first home or that perfect move-up dream house, make sure you know all your options. You may be pleasantly surprised.
Local Lender. Local Service.
We know that working with a local, competent home loan lender assures you the best home buying success. We recommend Jackie Murphy of Colbalt/Caliber Mortgage. Colbalt/Caliber Mortgage underwrites their loans locally, allowing for much faster service. Contact Jackie at 425-605-3122 or at email@example.com.
Washington State Natives
We know the Seattle-Everett-Eastside marketplaces and we understand why so many people call this area home. When you are ready to purchase your first or next home, give us a call, text or email and let these two native Washingtonians get to work for you!
-Steve and Sandra
Steve Hill and Sandra Brenner
Windermere Real Estate