The number 1 misconception about home financing

Typical down payments for home buyers 2015During and after the great housing crash of 2007-2008, home financing became almost impossible. Even the most qualified buyers had a  hard time getting a mortgage. At that point, in order to purchase a house, most buyers needed at least 20% down to qualify.

Unfortunately, the idea that 20% down payment is still required to purchase a house has persisted and is keeping many who would like to purchase a home on the sidelines scrambling to save that cash.

As you can see from the graphic, very few buyers actually put 20% down in 2015.  In fact, the average down payment for first time home buyer was only 4%, and even repeat buyers put down only 13%. Most buyers, even those with cash, opted to use that money to pay off debt and establish a rainy day fund.

It’s true that lending regulations remain much tougher than prior to the crash. A good credit history is still important, and with the exception of veterans and rural property buyers, 100% financing is just about impossible to find. However, financing is available with credit scores as low as 620, and as little as 3.5% down for just about anyone. Self employed buyers can sometimes even obtain a mortgage with only one year of tax returns.

Banks are flush with cash these days, and one of their favorite investments is housing. With money readily available for qualified buyers, you might check with your favorite lender, or call me for a referral to discuss the assorted lending options that are available to you.

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