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I HAVEN'T SEEN ANY INCREASED DOWN PAYMENT REQUIREMENTS

By
Mortgage and Lending with Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 NMLS # 6869

“I Haven't  Seen Any Increased Down Payment Requirements”

I keep reading articles that lenders are requiring larger down payments. I don’t see that at all.  I will give you some general guidelines for down payments. I am going to use 640 as the credit score.

VA Loans require no down payment

USDA loans require no money down.

FHA requires 3.5% down. 580 scores requires 10% down.

Conventional mortgages under $417,000 requires 3% down.

Jumbo loans require 10% down.

There are a number of variables, but to say lenders are requiring larger down payments, I am not seeing that at all.

 

Stable Housing Numbers: Down Payments Remain Elevated

By: Steve Cook

 

http://rismedia.com/2012-04-22/stable-housing-numbers-down-payments-remain-elevated/

Down payments greater than or equal to 20 percent were made by 34 percent of all residential home purchasers last month, a percentage that has remained relatively stable over the past year, according to the latest REALTOR® Confidence Index survey from the National Association of REALTORS®.

However, over the past several years, lenders have been raising down payment requirements.

The survey shows higher down payment costs than NAR’s 2011 Profile of Home Buyers and Sellers, which is based n part on 2010 transactions. For both conventional and FHA loans, which require only a 3.5 percent down payment, NAR reported the median down payment for all buyers was 11 percent in 2010-2011. First time buyers put about 5 percent down in 2011. Repeat buyers, pooling equity with savings, typically put down about 15 percent. However, investment and vacation-home buyers have been paying higher down payments than those buying a primary residence. The median down payment for both was 27 percent, according to NAR’s Profile of Investment and Vacation Buyers.

In January, Lending Tree reported that states with the highest median down payments were Washington, D.C. (13.5 percent), New York (13.47 percent), Hawaii (13.33 percent) and California (13.22 percent). The state with the lowest average down payment is North Dakota, where buyers put down an average of 11.34 percent.

Attention has focused on down payments in recent months for two reasons. Down payments are a major barrier to first-time buyers, whose market share has dwindled since the home buyer tax credits expired in 2010. A survey of buyers by Move, Inc. last fall found that half of all potential buyers planning to buy in two years or more are waiting in part because they lack the money for a down payment or closing costs.

A second focus has been a proposed regulation called QRM that would create incentives for lenders to offer loans at 20 percent or more. The regulation, being reviewed by regulators, is opposed by many housing, consumer and minority groups concerned that it would put homeownership out of reach of many American families.

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Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com

www.righttracfg.com

www.joepetrowsky.com

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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

Equal Housing Statement: We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing becuase of race, color, religion, sex, handicap, familial status, or national origin.

Comments (4)

Edward Gilmartin
CRE - Boston, MA

Income verificatin is killing a lot of folks I would imagine...they keep two books one for the IRS and one for the mortgage company.

Apr 29, 2012 10:38 PM
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Flower Mound, TX
Selling Homes Changing Lives

Joe,

Thanks for setting the record straight. There's a lot of misinformation out there and I'm grateful to always read your blog posts because when it comes to financing, nobody knows the current industry as well as you!

I still can't believe how great interest rates are and now is the time to buy. First home buyers needs someone with your caliber and skill to guide them through the process. Trust and integrity is where it all begins and I know they can get that from you. People who have owned Real Estate but hasn't bought in some time, needs to know that the rules are changing and that what people did in the past, does not apply today.

Thanks again for sharing information of value to all! Your information, which is always current and honest is very much appreciated.

 

Apr 29, 2012 10:50 PM
Roy Kelley
Retired - Gaithersburg, MD

Very good reminder that home buyers have several options for mortgage programs that offer low or no down payments.  

Have an outstanding week.

Apr 29, 2012 10:58 PM
Kevin A. Guttman-Author, ReverseMortgageSpecialist
NMLS #384936 - Colorado Springs, CO
877-251-9709

True Joe. Lots of good options out there for buyers still.

Kevin

Apr 30, 2012 01:14 AM