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Two mortgage myths some people just don't get!

Monday, October 07, 2019   /   by Vanessa Saunders

Two mortgage myths some people just don't get!

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We've often written about the myths connected to mortgage down payments, but the message still doesn't seem to be getting through to Hudson Valley home buyers. 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 homebuyers 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.” 
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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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Global Property Systems
Vanessa Saunders MBA MIMC CIPS - NYS RE Principal Broker
56 Lafayette Avenue Suite 320
White Plains, NY 10603
914-290-5258

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©2019 Hudson Gateway Multiple Listing Service, Inc. All rights reserved.

The data relating to real estate for sale or lease on this web site comes in part from MHMLS. Real estate listings held by brokerage firms other than Vanessa Saunders - Global Property Systems are marked with the MHMLS logo or an abbreviated logo and detailed information about them includes the name of the listing broker. The information appearing herein has not been verified by the Mid-Hudson Multiple Listing Service, Inc. or by any individual(s) who may be affiliated with said entity, all of whom hereby collectively and severally disclaim any and all responsibility for the accuracy of the information appearing at this web site, at any time or from time to time. All such information should be independently verified by the recipient of such data. This data is not warranted for any purpose. ©2019 Mid-Hudson Multiple Listing Service, Inc. All rights reserved.
The data relating to real estate on this website comes, in part, through the IDX of the Multiple Listing Service of Ulster County, Inc. Real estate listings held by brokerage firms other than Vanessa Saunders - Global Property Systems are marked with the IDX logo and detailed information about them includes the name of the listing broker.