Blessings Realty | Colorado Springs and Monument Realtor
Changing minds about Realtors
Making the choice to purchase a new home is a major decision for anyone. Once you’ve settled on the idea that you do want to buy a home, there are many more options you’ll have to face; one of the most important is the ideal size of a home to best fit your family and lifestyle. Here are some tips so that you can choose the right size home to meet your needs:
Is the idea of saving for a down payment holding you back from buying a home right now? You may be eager to take advantage of today’s low mortgage rates, but the thought of needing a large down payment might make you want to pump the brakes.
Today, there’s still a common myth that you have to come up with 20% of the total sale price for your down payment. This means people who could buy a home may be putting their plans on hold because they don’t have that much saved yet. The reality is, whether you’re looking for your first home or you’ve purchased one before, you most likely don’t need to put 20% down. Here’s why.
According to Freddie Mac:
The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.
If saving that much money sounds daunting, potential homebuyers might give up on the dream of homeownership before they even begin – but they don’t have to.
Data in the 2020 Profile of Home Buyers and Sellers from the National Association of Realtors (NAR) indicates that the median down payment actually hasn’t been over 20% since 2005, and even then, that was for repeat buyers, not first-time homebuyers. As the image below shows, today’s median down payment is clearly less than 20%.
As we can see, the median down payment was lowest for first-time buyers with the 2020 percentage coming in at 7%. If you’re a first-time buyer and putting down 7% still seems high, understand that there are programs that allow qualified buyers to purchase a home with a down payment as low as 3.5%. There are even options like VA loans and USDA loans with no down payment requirements for qualified applicants.
It’s important for potential homebuyers (whether they’re repeat or first-time buyers) to know they likely don’t need to put down 20% of the purchase price, but they do need to do their homework to understand the options available. Be sure to work with trusted professionals from the start to learn what you may qualify for in the homebuying process.
Don’t let down payment myths keep you from hitting your homeownership goals. If you’re hoping to buy a home this year, get in touch with Blessings Realty today to review your options.
Article source: https://www.keepingcurrentmatters.com/2021/02/03/do-i-really-need-a-20-down-payment-to-buy-a-home/.
The Federal Funds Rate is staying the same at 0 to .25%.
The Fed’s interest rate decision doesn’t directly affect mortgage rates, but today’s rates remain historically low.
Home owners and home buyers can take advantage of today’s low rates by:
Curious about the Fed’s key short-term rate? Learn more in this article.
Don’t hesitate to reach out for a conversation about home financing.
* Debt consolidation does not pay off the debt, please consult a financial advisor regarding the effect of consolidating short term debt into long-term debt.
Article provided by R. Gomez, Loan Officer in Colorado Springs.
