These last few years surveys find that prospective home buyers are worried about two things. The down payment and interest rates, as they are rising.
There is a lot of confusion as to how much of a down payment is necessary. Most buyers assume they need 20% of the purchase price as the down payment. This only one possible scenario. With 20% down, a borrower may qualify for a Conventional loan if they meet all the other requirements. As 20% of $450,000 (the price of an entry-level house these days) comes to $90,000. A would-be buyer is going to be saving for a very long time. Fortunately, there are other loans. An FHA loan can be had with as little as 3.5% down payment. A VA loan does not need a down payment, that’s right the down payment is 0%. Can someone who is/was not in the military get such a loan? No, though there are assistance programs that allow you to avoid the down payment altogether.
Due to the difficulty in saving almost six figures, there are various programs to help. The City, the County or non-profits can help you with all of the down payment and even some of the fees. These programs typically require:
- a 640 middle FICO score,
- steady employment for the last two years
- no derogatories (missed/late payments, repossessed car and the like) on your credit report.
Paired with a First-Time Buyer home loan, these programs turn renters into home-owners with just a few thousand dollars in savings.
Middle Income and Upper Middle Income
These assistance programs take many forms and include programs for middle income and upper middle income households. Most of them do not require you to buy in a particular neighborhood. You are free to pursue any home you can afford. Some will provide a grant which you do not have to pay back as long as you meet their qualification requirements.
Interest rates are and remain a concern as they are slowly rising. It would have been ideal to purchase a home last year when rates were lower. You can still benefit by purchasing a home this year simply because by this time next year you will find interest rates are higher than today and home prices will also have increased.
Home ownership brings many benefits, among them is that you are no longer at the mercy of your landlord. Get into a Fixed Interest Rate loan today and start enjoying a fixed housing payment for the next 30 years. Get started now by calling or messaging me at 760 622 5087. We’ll discuss all of these programs in detail. Then we’ll get you started on the one that makes the most sense for you.