According to Black Knight Financial Service’s Mortgage Monitor Report, 1.5 million Americans have purchased a home with down payments under than 10% over the last 12 months. This is great news for buyers as this marks a 7-year high.
Many mortgage programs offered by agencies like Freddie Mac and Fannie Mae allow buyers to put down as low as 3% to purchase their dream homes. The strength of the housing market has aided buyers who used low-down-payment programs to buy. As a recent CNBC article points out,
“Defaults on recent low down payment loans, so far, are slow, but that is as much a factor of the good credit quality as it is the strength of the housing market. Home prices are rising incredibly fast, meaning those borrowers are gaining equity in their homes quickly.”
Low down payments aren’t just great for first-time homebuyers. These programs have allowed homeowners who want to capitalize on the equity they have in their homes to use the profit from their sale to pay off high-interest credit cards, fund education or even start a business.
According to a new Census Report, the Annual Survey of Entrepreneurs, home equity was used to start 7.3% of all businesses in the United States, which equates to over 284,000! The industries that saw the most growth from home equity are accommodation & food services, manufacturing and, retail trade.
A USDA home loan is a zero down payment mortgage for eligible rural and suburban homebuyers (i.e. from Lanoka Harbor to Manahawkin). USDA loans are issued through the USDA loan program, also known as the USDA Rural Development Guaranteed Housing Loan Program, by the United States Department of Agriculture
Advantages of the USDA Home Loan Guaranteed Program:
- 100% financing
- No down payment requirement
- No Mortgage Insurance
- No Cash Reserves Required
- Loan up to 101% of appraised value
- Seller Contributions Limited to 6%
Guaranteed loans allow higher ratios based on PITI between 29 and 32 and TD ratio between 41 and 44 percent; all applicants credit scores 680 or greater; and additional compensating actors (PITI equal or less than current rent; minimum of 3 months cash reserves of PITI payments; or employment history 2+ years with current employer)
There are fees associated with this loan:
- 1% guarantee fee (can be financed into the loan)
- .35% lender fee
You can use this program in areas of Lanoka Harbor, Forked River, Waretown, Barnegat, Manahawkin and other portions in Ocean County
Bottom Line
You can buy a home in Ocean County today! Gone are the days of ‘20% down or no mortgage.’ What could you build with the equity in your house? Let’s get together today to evaluate your ability to achieve your dreams today!
As always, thank you for your time and feel free to get in touch if you have any questions. Karl Hess, Keller Williams Shore Properties - #1 Real Estate Office in Ocean County
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