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Hudson Valley home sellers: Take the money and RUN!


We’ve often written about the myths connected to mortgage down payments for Hudson Valley home buyers, but the message still doesn’t seem to be getting through. Here are two.

1. According to the ‘2019 Home Buyer Report’ conducted by Nerdwallet, many first-time buyers still believe they need a 20% down payment to buy a home in today’s market:
“More than 6 in 10 (62%) Americans believe you must put at least 20% down in order to purchase a home.”
When potential home buyers think they need a 20% down payment to enter the market, they also tend to think they’ll have to wait several years (in some markets) to come up with the necessary funds to buy their dream homes. The report continues to say,
“The truth: 32% of current U.S. homeowners put 5% or less down on their home, according to census data.”

2. Another misconception, sometimes held by sellers, is that a low down payment flags an offer as less desirable. In fact, neither party should balk at making or accepting an offer with a low down payment.
According to Barry Goldenberg, Senior Loan Originator for Luxury Mortgage, a low down payment shouldn’t be cause for alarm from sellers. As long as the loan is approved and the house appraises for the selling price, the sellers should have nothing to worry about regarding financing. Says Goldenberg, “As long as the buyer demonstrates an ability to repay the mortgage and their documentation has been reviewed by a mortgage professional, low down payments are perfectly fine in today’s mortgage environment.”

Goldenberg further states, “There are many options which allow first time home buyers to make a low down payment to purchase a home. There are conventional mortgages which allow as little as a 3% down payment of the purchase price. Also, there are FHA mortgages, insured by the federal government which require a 3.5% minimum down payment. These loans have more underwriting flexibility. They accept lower credit scores, higher debt to income ratios and allow for extenuating circumstances to be considered when applying for mortgages. There are also VA mortgages for active military personnel and armed forces veterans which allow for 100% financing as long as all other qualifications are fulfilled.”

Global Property Systems says:
Sellers shouldn’t worry about making an offer on a property using a low down payment .Nor should sellers worry about buyers putting down five, ten, fifteen or twenty percent.  If it’s your best offer, take the money and run!


 

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