The Facts About Downpayments
Responding to misinformation in the media and blogs recently about the required size of a down payment for a mortgage in today's market, NAR issued these facts:
1. An individual may be required to put down 20 percent based on that person's financial situation, but that is not an across-the-board requirement for all borrowers.
2. A borrower who puts down less than 20 percent is required to obtain mortgage insurance.
3. Even in a declining market, a borrower is required to make at least a 5 or 10 percent down payment.
4. FHA requires a 3.5 percent down payment by borrowers, so long as they meet a 31 percent housing cost-to-income ratio. In other words, anyone who stays within their budget and who can afford a 3.5 percent down payment (even with family help) can become a homeowner.
PLEASE NOTE: FHA market share has grown roughly tenfold in the past year to an estimated 30 percent of new mortgage originations.
The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
We thought this was important to share...
Nicole & Tony Tudisco