Mortgage information

Maybe it's because it's an important part of my job, but I am fully aware that home buyers do not need 20% down to finance a home. I understand it's common to think you need 20% saved, but it's not necessary and I want to express that to potential buyers out there. With conventional financing in our area, you can go as low as 5% down. Then there are other mortgage programs such as FHA and USDA financing that allows you to go even lower.
Putting more down (20%+) eliminates private mortgage insurance (PMI) fees every month, but you can refinance down the road and get rid of that if you originally only put less than 20% down.
I bring this up because I recently read an article on Yahoo! written by a woman that wasn't educated on the different loan programs. She spoke to lenders and they calculated that buying now with less down may actually save you money in the long run! Taking into account homes appreciating and interest rates continuing to rise, if you wait a few more years to save, you would have missed the current benefits.
Here is an example:

"Saving for 20 percent could cost thousands

Our lenders assured us we could get a loan with 10 percent down or, in some rare cases, even less. But I was still nervous. How could less equity equal more savings?

It's actually fairly simple: While we're busy saving, interest rates and home prices are going up. By the time we reach 20 percent down, that money won't buy us as much house as it will today.

So we decided to play hypothetical math and run some numbers. If we put 10 percent down on a house for $200,000 now and secure a 4 percent interest rate, we'll pay $384,365.11 over the life of the loan.

But if we wait a few years and put 20 percent down on the same house -- which we project might sell for $225,000 -- and secure a 7 percent interest rate, we'll wind up paying $455,613.79 over the life of the loan. That's $200 more every single month for 30 years, for a total of $70,000 more."

Pretty interesting huh? Makes complete sense though. I like her final remarks

"But if, like us, you don't have 20 percent saved up yet, you should still check out your options now. Don't wait; don't be afraid to start the process. Talk to lenders, talk to banks, talk to mortgage brokers and real estate agents.

My biggest mistake was not talking to lenders earlier and hearing about the kind of loans and homes we could actually get. Find out what you can afford and realize that you may well be closer to your dream home than you think."

For full article: http://homes.yahoo.com/blogs/spaces/puts-20-down-house-not-nearly-many-might-175056896.html

Here is a quick video on our national sales statistics for June: