The Millennial generation is the biggest in U.S. history. It's also the generation with the most debt. As a result, many young interested home-buyers can't even afford their down payment.
If you're in this bracket, you don't have to worry about this any longer. You just need a source that you can trust.
Don't wait for your dreams to pass you by. If you're interested, keep reading for the knowledge you need to make an efficient house down payment.
A Fair House Down Payment in Seattle
Most estimates predict 20% down payments will get you into the house you're looking for. For context, if the house you're looking for is $700,000, which is close to the median value for homes in Seattle, then you'd have to pay $140,000.
For most people, especially younger people looking to buy a home, $140,000 is the cost of two US college degrees. It's important to look at more than housing price on paper before moving in, you can still put down affordable down payments in the Seattle area (as little as 3.5%).
Look At Your Lenders
What does a Seattle mortgage lender look for? In short terms, a competent lender wants to see if you can afford the home you want to buy. Since most people aren't buying a home in one-go, lenders look for a home-buyer that has proven they're dedicated to making their payments consistently and on time via the credit report and down payment.
Things like your credit history and income will be considered. These factors might improve your chances of getting a solid down payment. In other words, if you can prove you're trustworthy to a lender, down payment becomes more of an option.
Furthermore, lenders are looking to see if you have any assets or past experience that'll make your payments more of a possibility. Are you a veteran? Are you a previous homeowner? All of these variables come into play when buying a home.
Money and You
You ask yourself, "how much down payment do I need in a house?" The fact is, the median cost for a down payment has reached close to $100,000 in Seattle.
There isn't a magic reason behind this, the change in down payment cost depends largely on the increase of property value in Seattle. It's a simple equation, the more people that arrive in Seattle and the fewer homes that are available, prices go up and the more money home-owners have to spend on a down payment.
The amount of money you put down decides how much you'll get back on a loan. Your payment not only decides how you can pay but the amount you'll have to spend. Therefore, it's a good idea to look for programs that enable you to put down more money faster.
Programs and Payment Options
There are many programs for low-income adults and families. Moreover, veterans programs and rural-grants can put you more at ease. Here's how to check if you qualify for any of these payment options.
FHA loans can get your down payment to 3.5%. You can also get accepted with low-credit when choosing FHA. FHA sometimes puts a burden on young home-starters later down the line because of the upfront insurance cost of 1.75% that is added onto the back of the loan.
Finding a local Seattle mortgage broker can increase your odds of finding state-supported strategies for lowering your DP. If that isn't your first choice, you can consider shopping around until you find a cheap home.
We have options for as little as 3% down, no PMI with a purchase up to ~$500,000 and a 5% down program for up to a $750,000 purchase. To set up a time to discuss low down payment options with a specialist, over the phone, Click Here.
Ways to Afford Your Down Payment
If you’re wondering how you’re going to be able to afford even 5% down, you might want to consider down payment assistance.
Down Payment Assistance
There are many options out there. From grants to lender-offered assistance, assistance doesn't have to come in the form of a loan. Some great forms of assistance are as follows:
- VA Loan
Let's look at these couple options incase you need the extra hand.
You can think of a grant as a sum of cash the government or other not for profit gives those in particular cases. Yours might depend on education, financial background, or some sort of artistic pursuit. Despite the reason, a grant can go towards your down payment to help with or cover the total cost.
You'll want to find a grant that fits your demographic and region. Moreover, it's important to look for funds that aren't disguising themselves as grants. To avoid this, do plenty of research on the grant you're studying.
Lastly, be sure to check application deadlines for any grant you apply for. Many grants run year long but may not overlap with other commitments you have lined up.
The VA Loan
The VA loan is a no down payment loan option that the US Military offers almost all military veterans. In short, you'll need to have some service under your belt. After that, you'll want to find a VA lender.
You can get quotes from veteran loan companies, despite the cost and your situation. However, you won't always get a deal that outweighs one offered by a different service or broker.
You'll need to be pre approved before moving forward. This process relies on a lenders understanding of your military background and current income. If you're a disabled veteran, you will have your funding fee waived.
Why is this a good option? For one, the VA loan is reusable. That means you can use this loan for several assets at a single time and still have opportunity left over. The only stipulation is that you pay off your loan each time by refinancing into a regular loan before using the VA loan again.
Why You Don't Have to Spend 20%
The 20% rule is a middle-ground number for most potential homeowners. You don't have to settle with a high percentage of the cost of your home. Instead, you can find a way to pay between 3-10%.
As stated earlier, your lender will be a deciding factor between you and cheaper down payments. Before you try negotiating a lower fraction of the total cost, try looking at your credit history and current income. This is likely to sway your lender to allow a lower down payment. If you can quickly increase your credit score then the loan should automatically become cheaper.
Advantages of Lower Rates
If you can swing less than 20% you'll have a lot less on your plate financially, and more money to invest in your home later on. It's not just about money though, in some cases you may find that the place you found isn't the home of your dreams. After all, it might be the first home you've put money into.
If that's the case, mortgages are the cheapest way to borrow money so a lower down payment will leave you with more available cash for the next purchase. Be sure to check with your broker about this to see what your standing is after putting down a payment.
Find The Right Home for You
You no longer have to wait for the same options again and again. You can find a lender that cares and wants to get you into the home of your dreams. All you need is a good sense of trust and know the direction you plan on traveling.
With rising home prices, finding a down payment can be hard. That's why you need a lender that's willing to lend a hand. What could be better than starting that process today?
It's your turn to take some action for your future. The Seattle area is beautiful and worth working for. All you need is a mortgage broker you can trust. Don't wait for the house you want to be taken, choose a broker you can trust to lower your down payment!