Hey there it’s KN with Sunrise Mortgage Group In Oregon City. I’m the Low and No Down Payment Home Loan Guy. In this short post I’m going to clear up 3 of the biggest misconceptions about low and no down payment homes loans. You’ll learn that these low and no down home loans are not that hard to qualify for and I believe that what I’m about to share will give you a higher level of confidence about being able to obtain one of these low or no down payment home loans if that’s your goal. The number 1 misconception I hear is that people THINK they need a big down payment to buy a home.
How much down payment is REALLY needed?
Misconception #1 Now I have to admit there is a lot of conflicting information floating around out there. I’ve even read things recently from “financial experts” that say you need to have 20% down payment and perfect credit to buy a home. And that’s just not true. Yea it would great to have 20% down payment because you can avoid the mortgage insurance premium but getting a 20% down payment is just not very realistic for most people. Especially first time home buyers. A 20% down payment on a 300k home is 60,000. YIKES! You don’t need 20% down payment.
What credit score do I need to qualify?
Misconception #2 is that you need to have perfect credit, or scores above 700. Now that is a big misconception because there are some low down loans that only require a 580 credit score. Yes, you heard me right… a 580 score. Now I will say…it definitely makes it easier to qualify and gives us more options if the scores are 620 or above. But you get the picture. You do not need perfect credit to get a low or no down home loan. And In many cases 580 or 620 scores can do the trick. I do have to throw in a disclaimer here that not everyone will qualify for these loans and it’s not my intention to lead anyone to believe that they will just because they have a 580 or 620 score as with any type of loan lender underwriting guidelines apply and eligibility is based on many factors including credit, income, debt and job history. The point is you do not have to have perfect credit. Far from it.
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How much difference will it make in my monthly payment if I save $10.000?
Misconception #3 has to do with how much impact the amount of down payment you save has on the total monthly payment. What I mean by that is a lot of folks say “well Kurt I’m going to wait to save up a bunch of money for down payment so I’ll have a lower monthly payment”. Ok, that makes sense, but, what really surprises people is when I tell them that for every 10,000 you save for down payment. that 10,000 in down payment only reduces the monthly payment by about 50-60 /mo. Don’t get me wrong. I’m not saying that saving up for a large down payment and having a lower payment isn’t a good thing but that extra 10,000 saved for down payment isn’t making that big of a dent in the monthly payment compared to how much work and time it takes to save $10,000
So there you have it I hope that helped… You don’t need a huge down payment, there are quite a few loans you can get with no to very little down payment… you don’t need great credit AND you don’t have to save for years to try and get a larger down payment… I sincerely want to help make your home buying experience a great one and it doesn’t cost anything to talk…so give me a call or shoot me an email and check out the helpful links below Thank you.