Can you buy a house with NO down payment? Well, the short answer is YES. There are many programs that help people purchase a home with no down payment. While to access such programs you may have to qualify for some special circumstance, I am always surprised the so many people still think they need a 20% down payment to purchase a house. If that was the case, in San Diego where the median home price is over $500, 000 anyone who wanted to buy would need ballpark, $100,000.00 to get a house. That is a hefty savings that it’s safe to say most people  do not have.Lender’s realized that if they were going to sell mortgages in San Diego, they needed to have realistic guidelines that didn’t put a full stop on the real estate market.

But, the good news is that this is an old-school practice and hopefully this article makes it an old-school belief.  While there are zero% down payment programs for Veterans, First Time Home Buyers, and DownPayment Grants  for Teachers and other special circumstances, the actual downpaymetn needed for a standard loan is WAY LESS than 20%.

That is, for a conventional, 30 year fixed-rate home loan, only 3% down payment is required. That sounds A LOT better, doesn’t it!? And that is if you don’t qualify for any down payment assistance or grants. Have you looked into it?

CLICK HERE  See What Down Payment Assistance Programs You Qualify For

The Aspiring Home Buyers Profile from the National Association of Realtors (NAR) found that the American public is still somewhat confused about what is required to qualify for a home mortgage loan in today’s housing market. The results of the survey show that non-homeowners cite the main reason for not currently owning a home, as not being able to afford one.

This brings us to two major misconceptions that we want to address today.

1. Down Payment

NAR’s survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 39% of non-homeowners say they believe they need more than 20% for a down payment on a home purchase.

Many renters may actually be able to enter the housing market sooner than they ever imagined with new programs that have emerged allowing less cash out of pocket.

2. FICO^® Scores

An Ipson survey revealed that 62% of respondents believe they need excellent credit to buy a home, with 43% thinking a “good credit score” is over 780. In actuality, the average FICO^® scores of approved conventional and FHA mortgages are much lower.

The average conventional loan closed in August had a credit score of 752, while FHA mortgages closed with a score of 683. The average across all loans closed in August was 724. The chart below shows the distribution of FICO^® Scores for all loans approved in August.

Bottom Line

If you are a prospective buyer who is ‘ready’ and ‘willing’ to act now, but are not sure if you are ‘able’ to, let’s sit down to help you understand your true options. Call 619,880.SDRE to discover your options today or just fill out this short form to see what down payment programs you qualify for.

Source: Housing Market & Real Estate News & Your Local Realtor.