The lack of downpayment money is by far the biggest reason people do not believe they can buy a home.
A recent survey even indicated 44% of non-homeowners thought you needed at least 20% down payment.
Clearly mortgage companies and real estate agents need to do a better job of educating non-home owners.
The reality is few people need 20% downpayment, and most people can buy a home in the areas we serve of MN, WI, and SD with little or no money down.
Popular no money down programs include VA home Loans for our active and military veterans. The USDA Rural Development program, which covers almost all of these three states except for the major cities, and finally, the very popular FHA program, which only requires a small 3.50% of the purchase price for down payment.
So do some people actually need 20% down payment? The answer is yes, some people do. This is primary just investment properties, or very expensive homes, that will need a loan of over $417,000.
Another awesome tool for first time homebuyers in MN, WI, and SD are the down payment assistance programs. There are many different programs. Some offered by city, county, or states. Talk to your loan officer about what you can qualify for.
In MN, we have a prgram offered in partnership with the Minnesota Housing Finance Agency, known as the Start Up Program. For those who qualify, you only need $1,000 of your own money for down payment. The program will provide an assistance loan for the rest.
So if you want to buy a home. You have OK credit, and the only big issue is a lack of down payment... You should apply, and find out what loans and options you qualify for - you just may be in your own home next month!
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