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The short answer is 3.5% down could make you a homeowner with an FHA loan on a 30-year fixed rate mortgage. The downpayment is determined on the home price and the maximum high-balance FHA loan limit in your area.

If you’re in the market to buy a home you should speak with a local mortgage advisor, period. This first step will save you time, energy, and money. Below are a few popular loan programs available in today’s market.

Home mortgage loans for you.

At the end of the day, lenders smile when homeowners afford a 20% downpayment on their new home. Most of my homebuyers swallow hard when they look at what a 20% down payment dent looks like in their pocket, but how much do you really need to stop paying your landlord’s mortgage and get into that house of your dreams?

Blue piggy bank

What are the benefits of a 20% down payment on a home purchase?

Lenders encourage 20% down payments. Statistics show that it’s more difficult to walk away from your mortgage obligation with this much skin in the game. Makes sense, right? On a home purchase of $500,000.00 20% down is $100,000.00. A major benefit would be lower rates, but there are several benefits to shell out that much dough.

  • A lower monthly payment (including PITI)
  • More equity for you off the bat
  • Typically fewer fees (loan fees)

What if I don’t have 20% down for a home purchase?

If this is the case you’re in the same boat as most homebuyers so don’t worry. Like we mentioned at the beginning of this article, you can actually buy a home with as little as 3% down, but it can be more expensive in the long run. The Federal Housing Administration (FHA) is a government agency who helps home buyers – they also happen to have wonderful programs set in place to help first-time homebuyers become homeowners.

What is the right down payment option for me?

The less downpayment you have squirreled away the higher risk you are for lenders which means more fees and higher rates – congratulations. One fee we don’t like to pay is mortgage insurance. Mortgage insurance is an upfront fee and typically a fee bundled into your monthly payment PITI for the life of the loan and you may have to qualify for a refinance to shack the mortgage insurance fee after 20% equity is realized.

House and a snail

Okay, so I want to buy a house. What do I do first?

Not go to an open house for starters. Be smart and talk with a professional mortgage advisor who has your best interest and will guide you through the loan options including taking time explaining the different fees. I understand it’s tempting to choose a lower down payment but you’re smart to look at the big picture. The upfront investment of a down payment is a one-shot deal and the monthly payments last for many years which shouldn’t be taken lightly.

Shelhamer real estate group

If you would like more information or a tour of this home please contact Glenn Shelhamer at 310-913-9477 or SEND AN EMAIL!

Other resources:

Picking the best mortgage lender – Bill Gassett

Mortgage loan types – Jeff Nelson

How to get a mortgage – Luke Skar

What causes homeowners insurance to rise and fall – Danny Margagliano

David Clark - 805.280.1425​

I’m David Clark, a Californian, real estate advisor REALTOR®, and writer for the Shelhamer Real Estate Group located in Northeast Los Angeles California, the fastest growing real estate market in Los Angeles County. Connect with me for further information about this article, and to add and optimize the value in your property. Look for me on Instagram: @sellingnortheastla

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Mls Disclaimer:

Based on information from the / Association of REALTORS® (alternatively, from the /MLS) as of [date the AOR/MLS data was obtained]. All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be, verified by broker or MLS. All information should be independently reviewed and verified for accuracy. Properties may or may not be listed by the office/agent presenting the information

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The Shelhamer Real Estate Group

361 N Avenue 57

Los Angeles, CA 90042-3403

 

Call: 310-913-9477

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THE SHELHAMER GROUP   |    DRE: 01950995

Glenn Shelhamer is a licensed real estate broker DRE: 01950995 in the state of California and abides by equal housing opportunity laws. All material presented herein is intended for informational purposes only. Information is compiled from sources deemed reliable but subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. To reach The Shelhamer Real Estate Group’s office manage please call (310) 913-9477.

©2019 Finance of America Mortgage LLC is licensed nationwide | Equal Housing Opportunity | NMLS ID #1071 (www.nmlsconsumeraccess.org) | 300 Welsh Road, Building 5, Horsham, PA 19044 | (800) 355-5626 | AZ Mortgage Banker License #0910184 | Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act | Georgia Residential Mortgage Licensee #15499 | Kansas Licensed Mortgage Company | Licensed by the N.J. Department of Banking and Insurance | Licensed Mortgage Banker — NYS Banking Department | Rhode Island Licensed Lender | Massachusetts Lender/Broker License MC1071. For licensing information go to: www.nmlsconsumeraccess.org. Questions, comments, concerns? Send to customerrelations@financeofamerica.com

This is not a commitment to lend. Prices, guidelines and minimum requirements are subject to change without notice. Some products may not be available in all states. Subject to review of credit and/or collateral; not all applicants will qualify for financing. It is important to make an informed decision when selecting and using a loan product; make sure to compare loan types when making a financing decision. Any materials were not provided by HUD or FHA. It has not been approved by FHA or any Government Agency. A preapproval is not a loan approval, rate lock, guarantee or commitment to lend. An underwriter must review and approve a complete loan application after you are preapproved in order to obtain financing.

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