@ Robin, as much as I agree with some of what you stated about Linda and her answer, because I felt it was all over, I disagree with your last comment also. You stated... "The only difference in closing costs when putting down less than 20% is the up-front MIP fee or Funding Fee on VA,"..
That is 100% incorrect... the other difference would be the pricing hits on a conventional mortgage, even if you put 20% down, because it's also based on the credit score. Hardly anyone brought up credit scores.. if you have 20% to put down and going conventional with a 620 credit score, you would have to pay an additional 3 pts out of pocket. At least with FHA, the upfront can be rolled in. So amny answers in this forum with very bad examples and or explanations, not thinking all of this out. No wonder borrowers get confused and sometimes get into a bad mortgage.
For the person that said putting 20% down is better, not always... just as I mentioned above and for the fact, that case is king... in some cases, your mortgage payment might only be a difference of $150, but it could be better to keep that $20,000 in your pocket. If you don't know it al, you should keep such comments to yourself. It's like financial planning.. you need to look at all options, and how to best spend the borrowerrs money....
Just to clarify, I did not state closing costs, I said "costs" to the buyer. Those costs can come in many forms. I will also point out that when commenting, I always advise anyone to speak with a local professional whether it be a Realtor or Lender or Real Estate Attorney, or even Home Inspector to get specific information to their scenerio. Loan costs to a buyer in my conversations include everything from the interest rate to the closing costs to the monthly PITI that may or may not include PMI.
Again, I also agree that this forum is a very basic initial way for the general public to get an idea of some of the questions they need to consider and ask their local professionals. Everyone should question anything they do not understand or have conflicting information on...it brings about a better understanding of the process they are going through when purchasing a home.
The answer to your question, as everyone has pointed out is; NO you do not need 20% to obtain a mortgage.
It will cost you more to carry it, however.
Get together with a reliable Mortgage broker who will be happy to explain all the confusing initials ( PMI,MPI etc. to you.)
I'd be happy to recommend someone to see for you. Just give me a call 201-618-0309
As you can see, there are various options available to you regarding your downpayment options, from as low as zero to 3.5, as well as other options if the property you are buying happens to be owned by Fannie, Freddie, or HUD (as little as 0% down).
Your best option is to contact a good lender that can discuss with you the many options available to you and your family and go over down payments, closing costs, and your full monthly payments. Some lenders such as HSOA can get you a full loan approval even before you have a contract so you can buy with confidence knowing ahead of time your full payment including taxes and Homeowner's insurance.
Best wishes, feel free to contact me at HSOA. Jim Ryan
You have answers from all over the country. Most answered your question....NO not all mortgages require a 20% down payment and in today's market most don't. BUT what was not addressed is typically the costs will reflect the lower down payment in that the costs to you the buyer will be more for the added risk the loan will carry with it being a higher ratio to the value of the property. Private mortgage insurance is typically a part of most lower or zero down payment mortgages in some form.
So, how far off will yo be from the 20% down? Does it make sense to wait to buy until you have saved enough to put $20%. Many refinance once they pay down their mortgage or their home appreciates to an 80% loan to value (LTV)
As has been mentioned, the best thing you can do is speak with a LOCAL lender to discuss your options as well as the costs over the course of the loan. Then work with a LOCAL Realtor to negotiate the best purchase on a home of your choice that fits your criteria. If you lost equity on the home you sold remember you will most likely be looking at other "added value" properties in today's market.
I agree, not sure why there are people replying from FL and HI. Even if the person in HI could do mortgages in NJ, there is a huge time difference.
In any case, the question has already been answered like 7 times... never did get that. I can help you answer any questions that you might have. Each program is different and there are income restrictions when it comes to USDA loans and specific geographical locations. If you can't qualify for that loan or a VA loan, your next best loan would be an FHA loan. Yes, there is the 97% Flex conventional program, but there are some pricing adjustments on that program. And if your credit scores are below 720, the pricing increases.
I can be reached at (609) 440-5133 cell or firstname.lastname@example.org
I most of the tri-state area, because of what is known as declining markets, you may need to put down 10% for a conventional loan, however there are many choices for you, as has been noted by others, you can go anywhere from 3.5% to 20%. If you are elligible for a VA loan, you don't have to put anything down.
Also, MB, if you are in New Jersey, why does your location on your profile say Hawaii?
Please see my blog with tips and advice on getting mortgage