The truth about home down payments...right now
With all the talk about the credit crunch and tough housing market, a lot of people are terrified of looking at houses because they're afraid they won't be able to get a mortgage. While it's true that credit score requirements are higher than ever -- somewhere north of 700 is helpful and subprime is a no-go -- a 20% down payment is not necessarily needed. This week The National Association of Realtors offered the following tips:Read Full Story
- An individual may be required to put down 20% based on that person's financial situation. But that is not an across-the-board requirement for all borrowers.
- A borrower who puts down less than 20% is required to obtain mortgage insurance.
- Even in a declining market, a borrower is required to make at least a 5 or 10% down payment.
- FHA requires a 3.5% down payment by borrowers, so long as they meet a 31% housing cost-to-income ratio. In other words, anyone who stays within their budget and who can afford a 3.5% down payment (even with family help) can become a homeowner.