Financing in Northfield>Question Details

Downsizing, Both Buyer and Seller in Northfield, NJ

Do all mortgages require a 20% down payment? I lost a lot of equity with the home I sold.... Not quit sure If I will be able to put down exactly 20%.

Asked by Downsizing, Northfield, NJ Sun Nov 14, 2010

20% on a new home.

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Answers

22
There are loans from 0% to 3.5% as minimum, depending on where you are buying and whether you are open to a FHA loan.

Good luck.
Web Reference: http://www.ruthandperry.com
0 votes Thank Flag Link Mon Feb 9, 2015
USDA will be eliminating some zip codes from the 100% list
A grant would be the way to go
0 votes Thank Flag Link Mon Feb 9, 2015
No, there are some 10% down programs out there. Just talk to your loan officer to find out about them. There are also FHA loans with a 3.5% down.
0 votes Thank Flag Link Wed Sep 3, 2014
Not all mortgages require 20%. Typically for a conventional mortgage it is a 20% down payment. However in Atlantic County we have USDA loans that offer 100% financing so you can get into a home with less than 1,000 dollars out of pocket. Also we have FHA loans that require 3.5 % as a down payment. I have quite a few properties that would qualify for the loans I am mentioning and if you would like to take a look at them you can reach me direct at 609-338-7364.
0 votes Thank Flag Link Wed Sep 3, 2014
Well said, Jeff...especially when even mortgage professionals have a hard time keeping up with all these changes....it's just a crazy time in the market...
Jim, HSOA.
0 votes Thank Flag Link Fri Nov 19, 2010
Still don't understand why real estate agents answer mortgage questions.

@ 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....

thanks,
jeff
0 votes Thank Flag Link Thu Nov 18, 2010
Dear Downsizing & Robin
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.
0 votes Thank Flag Link Thu Nov 18, 2010
Hi Downsizing,
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
Good luck,
Murph Plishtin
0 votes Thank Flag Link Thu Nov 18, 2010
No you do not have to put 20% down. There are programs where you can put as little as 3% down or nothing down if the location and your income qualify for a USDA loan. There is Mortgage Insurance required on all conventional loans with less than 20% down. The more down payment the lower the Mortgage Insurance. We have different options for mortgage insurance that could lower your monthly payment. I think this is available to most lenders so you should contact a lender in your area.
0 votes Thank Flag Link Mon Nov 15, 2010
Linda, providing incorrect information in this type of forum is not a good idea, because people may start to question what they are being told by those who know what they are talking about.. The only difference in closing costs when putting down less than 20% is the up-front MIP fee or Funding Fee on VA, however generally that is not paid as a closing cost, but added into the loan amount. The payment will be higher because of the PMI or MIP on a conventional or FHA, however that is not a closing cost. The only difference is that certain costs are higher if your loan amount is higher, but in NJ that is minimal. In NY it is more of a difference because of mortgage tax.
0 votes Thank Flag Link Mon Nov 15, 2010
Only VA and USDA mortgages allow 0% down. HUD owned home are available for as little as $100 down (and they often pay closing costs). FHA mortgages require 3.5% down. This does not mean that you qualify for any of these mortgages. Where in New Jersey are you looking?
0 votes Thank Flag Link Mon Nov 15, 2010
Hi Downsizing....

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
0 votes Thank Flag Link Mon Nov 15, 2010
Dear Downsizing
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.
0 votes Thank Flag Link Mon Nov 15, 2010
it is always better to put more money down; however there are many gov't programs out there.

good luck!
0 votes Thank Flag Link Mon Nov 15, 2010
Hi Buyer,

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 jbelonger@ihmci.com

Thanks,
Jeff
Area Manager
0 votes Thank Flag Link Sun Nov 14, 2010
Are you looking to buy in New Jersey? Not sure where that Naples posting came from, unless i didn't read something correctly.
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?
0 votes Thank Flag Link Sun Nov 14, 2010
I am a mortgage banker in NJ with 20 years experience and I would be happy to go over your FHA and conventional financing options with you. I can be reached at naitch6203@yahoo.com and 908 531 6170.

Thank you!

Mike
0 votes Thank Flag Link Sun Nov 14, 2010
Not all mortgages require 20%. FHA is only 3.5%, VA is 0%, most conventional loans are only 5%. If you are being asked to put down 20% it is because or credit or the property is an investment. your best bet is to meet with a local and trusted loan offcier, they can prequailify you looking at your credit scores and financials and let you know which programs and down payment guidelines may be available.

Please see my blog with tips and advice on getting mortgage
0 votes Thank Flag Link Sun Nov 14, 2010
Definitely talk with your bank or mortgage advisor about FHA financing. When you quality, your down payment will be a lot less than 20%.
Web Reference: http://www.321property.com
0 votes Thank Flag Link Sun Nov 14, 2010
There are other options. FHA loan requires 3.5% down. Other financial institution have numerous programs. I would contact a loan officer. Chris Wilhelm from Lincoln Mortgage. is extremely knowledgeable and can guide you in the direction that suits your needs. 856-810-1200 ex. 222.
0 votes Thank Flag Link Sun Nov 14, 2010
You are absolutely not required to put 20% down to get a mortgage. There are many mortgage products available that require much less depending on your credit rating, debt and income. The best advice I can give would be to talk to a reputable mortgage professional who can show you possibillities best suited to your needs. It's free and there is no obligation. If you need a couple of excellent recommendations, let me know and I would be happy to provide contact information. Just let me know what you need.
0 votes Thank Flag Link Sun Nov 14, 2010
No, you can buy a home with less than 20% down. If you qualify for an FHA loan it can be as little as 3.5% down and, believe it or not, there are even zero down loans available through the USDA. Talk to a realtor and a loan officer. They will be able to tell you exactly how much home you can qualify for and how much money you will need for a down payment. Then, decide how much of a payment YOU are comfortable with. Now is a wonderful time to buy. Don't let the thought of a 20% down payment stop you.
0 votes Thank Flag Link Sun Nov 14, 2010
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