Simplifying the Market™

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Buying a Home for as Little as 3-5% Down | Simplifying The Market

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.”

Bottom Line

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.

KATHRYN
LOVELL
 
 
RE/MAX Preferred Properties
Sevierville, TN
I am a licensed Broker.I specialize in representing my clients in the purchase and sale of single-family residences,lots and land, cabins, and investment property within Sevier County. I am a Louisiana native,born and raised in New Orleans.
Office-865-392-5885 Cell- 865-740-4877



   
RE/MAX Preferred Properties 953 Dolly Parton Parkway Sevierville, TN 37862 Office 865-392-5885 Cell 865-740-4877 Each Office Independently owned and operated Licensed in the state of Tennessee
All information deemed reliable but not guaranteed. The opinions expressed in this article are intended to supplement opinions on real estate expressed by local and national media, local real estate agents and other expert sources. You should not treat any opinion expressed in this article as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Steve Harney, Inc. does not guarantee and is not responsible for the accuracy or completeness of information, and provides said information without warranties of any kind. All information presented herein is intended and should be used for educational purposes only. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. All investments involved some degree of risk. Steve Harney, Inc. will not be liable for any loss or damage caused by your reliance on information contained in this article.