Low down payment mortgages
Over the weekend I read an article sent in to the Summit Daily concerning locals being long time renters and not being able to save 15 percent for a home down payment. The author of this is grossly misinformed as for as long as I have been in the mortgage profession, which is a dozen plus years, there have been numerous mortgages for potential buyers with zero to 3 percent down mortgage programs.
Now I am not writing this to embarrass the writer but like a lot of things in life, a little bit of knowledge of a subject can be dangerous. And to add to that others may have read where it takes 15 percent of the purchase price to but a home. Wrong!
The Federal Housing Administration (FHA) and the Veterans Administration (VA) have been offering low down payment loans for years and years. And in the case of FHA there are ways for some home buyers to have as little as zero out of pocket costs.
But let me add to all of this is the buyers/borrowers must meet some very basic qualifications. As an example the buyers must have a source of income that can be documented, and this can be done for buyers who work part of the year in the ski industry and the other part of the year as river rafting guides.
Plus the buyers must have a credit history. This can be credit cards, old car loans or student loans. I have even been able to work with investors with what is known as alternative types of credit such as insurance payments and cell phone accounts.
So you can see that mortgage lenders do have low down payment mortgages available and the fact that they are in business to make loans, not just deny loans. I strongly suggest that if you are considering the purchase of a home you contact me or another mortgage professional to discuss how you can be a home owner.
Expect to hear from the broker such facts as the buyers/borrowers need to document at least one year of income. Plus that income earned must be sufficient to make the mortgage payments, and all other debts the buyers have currently. As an example, if the buyers gross monthly income is $5,000.00 a month and with the proposed mortgage payment the borrowers debt is $2,000.00 a month they will most likely meet the “Debt to Income’ acceptable ratios. But if the buyers debt, with the mortgage payment, is $3,500.00 chances are the mortgage will not be approved.
The bottom line is that there are numerous low down payment mortgages still available. The fact also exists that the buyers/borrowers must have income to support the payments, have a decent credit history and an established credit history. So do not be mislead by someone not in the know, meet with a full time established mortgage lender to learn what mortgage programs are available to you with your specific situation.
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