Most parents don’t put a lot of credence in the statements “Everyone is doing it” and “No one does that anymore.” They’ll dig a little deeper and get the facts of the situation. Interestingly, when it comes to buying a home, similar common myths continue to prevail surrounding what it takes to buy a home.
One of the most common myths is that it takes 20% down payment to get into a home. Certainly, an 80% mortgage might have the most favorable interest rate. It won’t require mortgage insurance and qualifying requirements might be a little less but there are alternatives.
“88% of all buyers financed their homes last year and consistent with previous years, younger buyers were more likely to finance their home purchase. In 2018, the median down payment was 13% for all buyers, 7% for first-time buyers and 16% for repeat buyers.” Stated by the 2018 NAR Profile of Buyers and Sellers.
- Qualified Veterans are eligible for zero down payment, 100% mortgage loans without mortgage insurance.
- Conventional loans are available with as little as 3-5% down payments.
- FHA mortgages have a 3.5% down payment.
- USDA mortgages for rural housing have two major products: one does not require a down payment and the other has a 3% down payment. Maps, based on population numbers, are available to determine if the area you’re interested in purchasing in is eligible for a USDA mortgage.
We’ve come to believe that facts can be instantly verified by searching on the Internet. Unfortunately, there are a lot of things on the Internet that are questionable and certainly, that includes some information on mortgages. Specifically, some loans are not available in certain areas and to a particular persons based on their income and credit history.
The best approach, when it comes to buying a home, is to get the facts from a knowledgeable and trusted loan professional before you begin the home search process. Contact me at (313) 909-5851 for a recommendation.
A website may not provide relevant information for your individual situation. Purchasing a home is a large investment and taking the time to find out the facts is worth the effort.