With some of the answers below, be careful of who tells you that the higher the scores the better. That is an unknown until you know what credit scores. I have written many posts on the fact even with 10% down and credit scores of 699, that FHA is cheaper.
@ Marcus.. the question was about 20%... as loan officers, we need to go over all scenarios and explain different scenarios... it's easy to say FHA allows for 3.5% down. But in my opinion, you need to show different variations. Just my opinion.
http://www.naplesrealestateguys.com/ or a local Mortgage Broker at "Find a Pro" in the header of this website. http://www.naplesrealestateguys.com/
Rosa Agency Realtors
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Kearny Nj 07032
ideas, please call me and we can get started,
Palisades Real Estate of Fort Lee
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Fort Lee, Fort Lee, NJ 07024
You need to check all options with several reputable mortgage brokers/lenders. Jeff made some very good suggestions and comments.
Just FYI, Wells Fargo is offering FHA loans to people with lower scores. Simple synopsis is:
Borrowers with credit scores 500-579 need a 10% downpayment (their cash) and the downpayment may NOT be a gift or be part of a downpayment assistance program.
Borrowers with credit scores 580-599 but 5% downpayment is required (their cash), and the downpayment may NOT be a gift or be part of a downpayment assistance program.
Borrowers with a credit score of 600 or higher are required to have a 3.5 percent down payment, and a gift is acceptable.
For all borrowers, seller concessions are limited to 3 percent.
Might be worth talking to someone at Wells also to see what your options are, and how it will fit into your budget.
I'm happy to assist you in your home search or help you anyway i can.
Don't give up!
There are a lot of "ifs" to consider.
If your income will remain stable or increase,
If your job is stable, and continued employment is highly likely,
If the cause of any credit bruises has passed,
these are indicators that you may be ready to purchase soon.
If there is a possibility of your credit score raising in 60-90 days, it may be worth it to work on that. How long will it take you to save 20%? If its a long time, the increase in interest rates may make it a better choice to purchase with 5% or 10% down.
The advice you receive from a competent mortgage professional can be invaluable. A frank discussion and review of your income, assets and credit is needed to provide you meaningful advice on this matter.
My response is, "It depends." Although I tried to additionally provide you a few considerations that would guide decisions.
It really depends on the cash you and have and what you want left over. Even with 20% down on a conventional loan,it will cost you 3 pts more than it would on a FHA loan.Yes, you won't have mortgage insurance on a conventional loan, you will have mortgage insurance even with 20% down on a FHA loan. In my opinion and after doing scenarios, mostly depending on your goals, it still would be better for you to go with a FHA loan even with 20% down... but it again, it comes down to have much cash you have. I truly believe that cash is king and that you should keep more of it in your pocket. I have written several articles showing you differences and I advise you to read these.
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With an FHA loan, you can put down as little as 3.5%, but keep in mind that the less you put down the higher your monthly payment will be.