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Thursday, December 18, 2014

New options to buy a home with a small down payment

Guest Blogger: Today's post is written by Sacramento Mortgage Expert, Matt Gouge.  All of his contact info and more can be found at this website: www.mattthemortgageguy.com. Thank you Matt for providing this great info for potential buyers in our Sacramento Real Estate Market.

The 97% LTV Mortgage and why buying a house is not as hard as you may think…

            By MattTheMortgageGuy
Fannie Mae announced last week their new 3% down payment program, joining other government agencies that offer loans with little to no money down…

“Our goal is to help additional qualified borrowers gain access to mortgages,” said Andrew Bon Salle, Fannie Mae Executive Vice President for Single Family Underwriting, Pricing and Capital Markets. “This option alone will not solve all the challenges around access to credit. Our new 97 percent LTV offering is simply one way we are working to remove barriers for creditworthy borrowers to get a mortgage. We are confident that these loans can be good for business and lenders, safe and sound for Fannie Mae and an affordable, responsible option for qualified borrowers.”

There are quite a few misconceptions in mortgage and the one that I have encountered time and again with new buyers is the thought that the purchase of a home requires a large down payment. This is simply not the case and the truth of the matter is that a majority of the loans that are written these days require 5% down or less.

I’m not just talking about the clients who are able to finance with the VA and put 0% down. Nor am I only talking the ones who use FHA and are able to get Down Payment Assistance that pays all but .5% of the down payment.  Securing Conventional financing with a small down payment is an excellent option for many folks and one that is quite common with today’s buyers.

Another misconception is the sentiment that qualifying for a mortgage is impossible. This is simply not the case. Are guidelines stricter than the days of approving folks with no income and no assets for a mortgage they can’t afford?(2003-2006). Of course they are. Are guidelines unreasonably strict and is it hard to get approved for a mortgage? Absolutely not.

As is evidenced by this announcement of a 3% down Fannie product, loan guidelines are softening to adapt to a market where financial institutions see the need to expand their product lines to give opportunity to a wider market. The exciting part for professions like me in the lending industry is that we understand this trend will continue and we know loans will only continue to become more and more accessible in 2015 and 2016. FHA reform and other lending changes are already being discussed so it’s not a matter of if, but rather of when.

If you or someone you know is looking into buying and you want to know all of your options, (Many of which require very little down payment), I encourage you to reach out to a mortgage professional. You may be surprised to learn that you are ready to take that exciting leap of becoming a homeowner.

Connecting people and homes, one loan at a time…
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Thanks again Matt for your guest blog post.

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clear skies,
Doug Reynolds




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