Wondering How Much You Need To Save for a Down Payment?

home loans with no down payment, 0 down mortgage, zero down home loans, down payment assistance, fha approved lenders, fha loan application, fha mortgage interest rates, Mortgage Broker, Mortgage Broker Near Me, Mortgage Broker Elk River, Elk River Mortgage Broker

If you’re getting ready to buy your first home, you’re likely focused on saving up for everything that purchase involves. One cost that’s likely top of mind is your down payment. But don’t let a common misconception about how much you need to save make the process harder than it could be.

Understand 20% Isn’t Always the Typical Down Payment

Freddie Mac explains:

“. . . nearly a third of prospective homebuyers think they need a down payment of 20% or more to buy a home. This myth remains one of the largest perceived barriers to achieving homeownership.

Unless specified by your loan type or lender, it’s typically not required to put 20% down. This means you could be closer to your homebuying dream than you realize. According to the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. In fact, the median down payment today is only 14%. And it’s even lower for first-time homebuyers at just 6% (see graph below):

Mortgage Broker, Mortgage Broker Near Me, Mortgage Broker Elk River, Elk River Mortgage Broker VA home loan, veteran home loan, best mortgage rates today, apply for VA home loan

Learn About Options That Can Help You Toward Your Goal

Mortgage Broker, Mortgage Broker Near Me, Mortgage Broker Elk River, Elk River Mortgage Broker, get pre-approved for a home loan, mortgage pre-qualification, mortgage preapproval process, mortgage preapproval
Mortgage Broker

If saving for a down payment still feels like a challenge, know that there’s help available. A real estate professional and trusted lender can show you options that could help you get closer to your down payment goal. According to the latest Homeownership Program Index from Down Payment Resource, there are over 2,000 homebuyer assistance programs in the U.S., and the majority are intended to help with down payments.

Plus there are even loan types, like FHA loans, with down payments as low as 3.5%, as well as options like VA loans and USDA loans with no down payment requirements for qualified applicants.

To understand your options, be sure to do your homework. If you’re interested in learning more about down payment assistance programs, contact Jim Riley with United Family Mortgage today at 612-968-2601 or email jriley@unitedfamilymortgage.com.  Jim has over 30 years of experience helping buyers secure mortgage financing.

 

Bottom Line

Remember, a 20% down payment isn’t always required. If you want to purchase a home this year, let’s connect. You’ll also want to make sure you have a trusted lender so you can explore your down payment options.

Avoid the Rental Trap in 2023

 

home loans with no down payment, 0 down mortgage, zero down home loans, down payment assistance, fha approved lenders, fha loan application, fha mortgage interest rates, Mortgage Broker, Mortgage Broker Near Me, Mortgage Broker Elk River, Elk River Mortgage Broker

If you’re a renter, you likely face an important decision every year: renew your current lease, start a new one, or buy a home. This year is no different. But before you dive too deeply into your options, it helps to understand the true costs of renting moving forward.

In the past year, both current renters and new renters have seen their rent go up based on information from realtor.com:

Three out of four renters (74.2%) who have moved in the past 12 months reported seeing their rent increase. The strain from recent rent hikes isn’t exclusive to renters who have recently moved. Nearly two-thirds of renters (63.2%) who have lived in their current rental between 12 and 24 months, and likely renewed their lease, have also reported increases in their rent.”

And if you look back at historical data, that shouldn’t come as surprise. That’s because, according to the Census, rents have been rising fairly consistently since 1988 (see graph below):

Mortgage Broker, Mortgage Broker Near Me, Mortgage Broker Elk River, Elk River Mortgage Broker, get pre-approved for a home loan, mortgage pre-qualification, mortgage preapproval process, mortgage preapproval

So, if you’re considering renting as an option in 2023, it’s worth weighing whether this trend is likely to continue. The 2023 Housing Forecast from realtor.com expects rents will keep climbing (see graph below):

home construction loans, residential construction loans, new construction loans, new construction loans, spec home construction financing, jumbo construction to permanent loan, mortgage loan for house construction, Mortgage Broker, Mortgage Broker Near Me, Mortgage Broker Elk River, Elk River Mortgage Broker

That forecast projects rents will increase by 6.3% in the year ahead (shown in green). When compared to the blue bars in the graph, it’s clear that the 2023 projection doesn’t call for an increase as drastic as the ones renters have seen over the past two years, but it’s still above the historical average for rent hikes between 2013-2019.

That means, if you’re planning to rent again this year and you’ve not yet renewed your lease, you may pay more when you do.

Homeownership Provides an Alternative to Rising Rents

These rising costs may make you reconsider what other alternatives you have. If you’re looking for more stability, it could be time to prioritize homeownership. One of the many benefits of owning your own home is it provides a stable monthly cost that you can lock in for the duration of your loan. As Freddie Mac says:

Monthly rent payments may increase over time, but a fixed-rate mortgage will ensure that you’re paying the same amount each month. With a fixed-rate mortgage, your interest rate is locked in for the life of loan. Steady payments allow you to budget wisely and make plans for the future.”

Mortgage Broker

If you’re planning to make a move this year, locking in your monthly housing costs for the duration of your loan can be a major benefit. You’ll avoid wondering if you’ll need to adjust your budget to account for annual increases like you would if you left your housing payment up to your landlord and their renewal cycle.

Homeowners also enjoy the added benefit of home equity, which has grown substantially. In fact, the latest Homeowner Equity Insight report from CoreLogic shows the average homeowner gained $34,300 in equity over the last 12 months. As a renter, your rent payment only covers the cost of your dwelling. When you pay your mortgage on a house, you grow your wealth through the forced savings that are your home equity.

Bottom Line

If you’re thinking of renting this year, it’s important to keep in mind the true costs you’ll face. Let’s chat to see how you can begin your journey to homeownership today.

For a hassle-free mortgage consultation or a second opinion, contact Jim Riley with United Family Mortgage today at 612-968-2601 or email jriley@unitedfamilymortgage.com.

62% of Buyers Are Wrong About Down Payment Needs

home construction loans elk river, home construction loans Monticello, home construction loans ramsey, home construction loans ramsey mn, home construction loans, home construction loans Zimmerman, new construction mortgage elk river, new construction mortgage ramsey mn, new construction mortgage ramsey, new construction mortgage Zimmerman, new construction mortgage rogers, new construction mortgage, home loans with no down payment ramsey, home loans with no down payment ramsey mn, mortgage broker rogers, mortgage broker, va home loan ramsey, va home loan ramsey mn

According to the ‘2019 Home Buyer Report conducted by Nerdwallet, many first-time buyers still believe they need a 20% down payment to buy a home in today’s market:

“More than 6 in 10 (62%) Americans believe you must put at least 20% down in order to purchase a home.”

When potential homebuyers think they need a 20% down payment to enter the market, they also tend to think they’ll have to wait several years (in some markets) to come up with the necessary funds to buy their dream homes. The report continues to say,

“The truth: 32% of current U.S. homeowners put 5% or less down on their home, according to census data.” (as shown below):

fannie mae home loans Zimmerman, fha 203k lenders ramsey, fha 203k lenders ramsey mn, fha approved lenders ramsey, fha approved lenders ramsey mn, fha approved lenders, fha loan application ramsey, fha loan application ramsey mn, fha loan application, fha mortgage interest rates ramsey, fha mortgage interest rates ramsey mn, fha mortgage interest rates, fha streamline loan ramsey, fha streamline loan ramsey mn, fha streamline loan, freddie mac mortgage rates today ramsey, freddie mac mortgage rates today ramsey mn, freddie mac mortgage rates today, freddie mac mortgage rates today Zimmerman

The lack of knowledge about the home-buying process is unfortunately keeping many motivated buyers on the sidelines.

 

Bottom Line

 

Don’t let a lack of understanding keep you and your family out of the housing market. Let’s get together to discuss your options today.

 

apply for va home loan elk river, apply for va home loan, 0 down mortgage ramsey, 0 down mortgage ramsey mn, 0 down mortgage, apply for va home loan ramsey, apply for va home loan ramsey mn, apply for va home loan, best mortgage rates today Monticello, best mortgage rates today Monticello mn, best mortgage rates today, best mortgage rates today ramsey, best mortgage rates today ramsey mn, best mortgage rates today Zimmerman, down payment assistance ramsey, down payment assistance ramsey mn, down payment assistance, fannie mae home loans ramsey, fannie mae home loans ramsey mnRelated topics:  What FICO® Score Do You Need to Qualify for a Mortgage?

For a Hassle-Free consultation on Home Refinancing, First-Time Home Buyer Mortgage, Zero-Down Mortgage, Home Construction Loan or VA Home Loan, contact DJ Riley today at 763-276-3960 or via email djriley@unitedfamilymortgage.com.

 

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.