Buying Real Estate with a Small Down Payment

coin houseLooking for another sign that the housing market is bouncing back? In addition to continued low interest rates, bidding wars, and increased building starts, you can now add low down payments to the list of good omens.

Since 2007, amassing the down payment has presented the biggest obstacle to purchasing Magnolia Texas real estate, especially for first-time buyers and those in lower income brackets.  However, homebuyers with little money for a down payment are now finding more home loans available for a low down payment– or even no down payment.

Consider the following:

  • Piggyback loans are reappearing. (In a piggyback loan, one lender loans 80 percent, while a second lender loans enough to equal 20 percent of the purchase price when combined with the buyer’s down payment, thus allowing the purchaser to avoid paying private mortgage insurance).
  • Mortgage lenders are starting to ease mortgage restrictions. This time around, though, lenders are much more discerning about who gets to put 10% down. To qualify, your monthly housing, car, student loan, and credit card debt can’t be higher than 45% of your monthly income. And you must have a credit score above 700.
  • Options for borrowers have increased:

If you’re a veteran, you can get a mortgage with no down payment. Additionally, mortgages backed by the Federal Housing Administration allow you to purchase a home with as little as 3.5 percent down. Banks also offer various programs for those with less The Department of Agriculture’s Rural Development mortgage guarantee program is so popular that it has been known to run out of money before the end of the fiscal year.

Navy Federal Credit Union offers 100 percent financing to qualified members for buying primary homes. Credit union eligibility is restricted to members of the military, some civilian employees of the military and U.S. Department of Defense, and family members.

The Department of Agriculture’s Rural Development mortgage guarantee program is so popular that it has been known to run out of money before the end of the fiscal year. Offering 100% financing, it is designed to assist rural homebuyers with limited or moderate incomes.

About 15 percent of all purchasers get FHA-insured loans, up from 3 percent during the housing boom. The FHA gained market share after many other low-down-payment options evaporated in the housing bust.

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Whether you are new to the Magnolia Texas real estate market, thinking of moving up, or you’re an experienced investor, Pam Sitterly has the expertise, proven track record, and resources to help you buy Magnolia TX real estate for sale or market Magnolia TX homes for sale. Enthusiasm, knowledge of the area and personal concern for her client’s interests combine to make Pam an outstanding resource for your real estate transactions.

Pam works extensively to help Buyers and Sellers meet their Magnolia Texas real estate goals. For more information about buying or selling your Magnolia TX home, please call Pam at 281-723-0324 or via email with this convenient contact form.