Yes, You Can Buy a House with a 3% Down Payment
There’s a new down payment program that’s taking the mortgage industry by storm. Earlier this year, Fannie Mae and Freddie Mac announced a new conventional loan program that allows homebuyers to purchase a house for as little as 3% down. Couple this low down payment loan with historically low interest rates, and you’ll quickly understand why experts are calling 2015 the year for first-time homebuyers.
Who is this program for?
Geared toward homebuyers who may lack the resources to save for a large down payment, this new 3% down payment program reduces the upfront cost of purchasing a home. With a smaller upfront investment required on behalf of the buyer, housing is made more affordable and put within reach of those who meet standard underwriting guidelines.
Many of today’s fist-time homebuyers are qualified to take on a mortgage and have the financial means to repay their obligations. They have sufficient income to take on additional debt and maintain strong credit histories. The biggest challenge first-time homebuyers face is the ability to accumulate the additional funds needed to close, based on the traditional 20% down financing.
Saving for a down payment
While conventional wisdom says you should have a 20% down payment, this old way of thinking doesn’t take the unique financial needs of today’s homebuyers into consideration.
Saving money for a down payment takes time. According to research, it would take the average American more than a decade to save up for a 20% down payment on a median-priced home. For those looking to buy a home within the near future, that’s simply not feasible.
The good news, however, is that a 3% down payment is well within reach for many homebuyers. In fact, many homebuyers may be surprised to learn they already have the funds available to buy a house. Read this post to discover 15 places your down payment might be hiding.
If you’re looking to buy a home in 2015 and are interested in learning more about about this exciting new program, send us a message! As your trusted mortgage provider, we’d be happy to help you discuss your options and look forward to working closely with you for all of your home financing needs.
