The lack of down payment money is by far the biggest reason people do not believe they can buy a home.
A recent survey even indicated a whopping 44% of non-homeowners thought you needed at least 20% down payment, and that simply isn't true for most home buyers. Clearly mortgage companies and real estate agents need to do a better job of educating non-home owners. The reality is very few people need anywhere close to 20% down payment, and most people can buy a home in the areas we serve of Minnesota, Wisconsin, and South Dakota with just a few thousand dollars out-of-pocket, or in some cases, even 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.
Low down payment loans include the very popular FHA program, which only requires a small 3.50% of the purchase price for down payment, or the conventional HomeReady program, which only needs a small 3% 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 $424,100.
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 Minnesota, we have a program 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. Similar programs exist in many states.
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!Ready to buy a home in MN, WI, or SD. It all starts with a simple ONLINE APPLICATION.
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Joe Metzler is a Senior Mortgage Loan Officer for Minnesota based Mortgages Unlimited. He was named the 2014 Minnesota Loan Officer of the Year, and Top 300 Loan Officers in the Nation for 2010, 2015, 2016. He provides Home Mortgage Loans in MN, WI, and SD. He can be reached at (651) 552-3681. NMLS 274132.
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