Only have a small downpayment for your home? You’re not aloneTerry Riffe | June 16, 2015
Only have a small downpayment for your home? You’re not alone. Many first time home buyers are overwhelmed by all the questions to ask before jumping into homeownership. People often wonder, “Am I ready? Is this a good investment for me? Can I afford it? Will I live here long enough to warrant buying a place instead of renting?” Perhaps the biggest concern is how to pay for such a big purchase. Oftentimes, first-time buyers cannot afford a large downpayment. According to data from the National Association of REALTORS® Confidence Index, in the months of December 2014 through February 2015, about two-thirds of first-time home buyers made a down payment between 0-6 percent. And while the number of small down payments is lower than it was in 2009 (when 77 percent of down payments were in the 0-6 percent range), it is higher than this time last year (when 61 percent of down payments for first-time buyers fit in that range).
While lenders are accepting lower down payments, it is wise to keep in mind that these lower down payments come at a price. If you purchase a home with less that 20 percent down, you’ll probably have to buy some form of mortgage insurance. Though paid for by the borrower, mortgage insurance protects the lender’s interest in the loan in case the borrower defaults.
There are many options for any first-time home buyer to take. this is one of the many reasons it is important that you choose a professional REALTOR® to guide you through the process. I would be happy to help you with any of your home buying or selling needs. Call me 1 (407) 800-0888 or send me an email email@example.com.