The myth of the mortgage downpayment


Did you know that the median down payment for first-time home buyers has been six percent for three straight years?

If you answered no to this question, you are likely not alone. According to the National Association of Realtors’ (NAR) “aspiring home buyer profile,” 87 percent of non-homeowners indicated that a mortgage down payment of 10 percent or more is necessary.

The profile also finds that eight out of 10 non-owners indicated that owning a home is part of their “American dream.” Yet, the confusion about down payment requirements is keeping aspiring home buyers from breaking in to the real estate market.

“Being unable to afford to buy was the No. 1 reason non-owners cite as to why they don’t own. Unrealistic expectations about down payments have kept creditworthy borrowers with manageable levels of debt from exploring the prospects of buying a home,” said a statement by the Taos County Association of Realtors (TCAR). 

Every prospective buyer is different, but consumers should talk to lenders about their qualifications before throwing in the towel on their homeownership dreams.

“Those interested in buying their first home in 2017 should gather their financial paperwork, sit down with a lender to discuss their qualifications, and talk to family and friends for recommendations about a Realtor who can help them get started on their home search,” said TCAR.

For those renters out there who are ready to join the majority who buy a home with less than a 20 percent down payment, they should follow these tips to help get started.

• Review your financial situation and personal savings to determine how much you can comfortably utilize for a down payment.

• Visit a few lenders and seek a mortgage pre-approval to determine how much money you are actually qualified to borrow. This will allow you to look at homes you can actually afford and not get disappointed when you can’t get financing for a home priced above what you will qualify for.

• Find a Realtor and discuss your budget and needs. This will help a Realtor hone in your search and only show you available homes in your price range.

• Rely on professional help from the experts. This includes a Realtor and your lender. The U.S. Department of Housing and Urban Development also has a state-by-state resource guide of homeownership and home buying assistance programs in your state.

Buying a home is often a complicated process, but with a little work and a Realtor (a member of NAR) by your side, 2017 may be a good time to start looking.

TCAR serves all of Taos County, western Colfax County and surrounding communities. For more information, call (575) 758-7411, or visit Stenum is qualifying broker/partner of Casa Encantada Realty.


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