Home Buying in Brooklyn>Question Details

Matt Mullings, Real Estate Pro in New York, NY

How much longer do you think banks will be willing to take 3.5% down?

Asked by Matt Mullings, New York, NY Tue Jul 31, 2012

Im looking to buy a brooklyn multifamily house in mid-late 2013, do you guys think that by then it will still be easy to find a bank thats willing to take 3.5% down?

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Hard to tell. I would take advantage of these low rates. Once the market changes, you will wishing you had. The cape cod market is very busy. Call Team Stevens & Manley with any of your real estate questions. We are here to help. Call us direct: Kriss Stevens 508-648-0013 or Scott Manley 508-360-1771 or Alex Peter 251-689-4988 or visit our informative website: http://www.CapeHomesUnlimited.com/blog
2 votes Thank Flag Link Tue Jul 31, 2012
We got a great rate!!
Flag Tue Aug 28, 2012
We are fortunate on Cape Cod. I was able to finance with no stress.
Flag Thu Aug 9, 2012
Gamble while you still can with 3.5% down. FHA Loan program - in my opinion is the worst program ever created. If you can't afford 20% down you should not be allowed anywhere near the homeownership. But as of right now FHA is still there and abusing it and gambling is very easy. Take as much loan as you can with 3.5 down wait a few years if RE goes up - great you made some money and if RE doesn't go up - walk away you only loosing pennies with 3.5 down.
1 vote Thank Flag Link Tue Jul 31, 2012
In all honesty, I do not see the economy getting much better, which might be a plus for you. To spark new business the FHA loans are at an all time low - 3.5%. The only thing I can see in the near future that will raise that rate would be a dramatic drop in home prices and a large buying population in the spring of 2013. - If this does happen, the rate will go up slightly, but not much.

No one can accurately predict this, but I think this is a good guideline.

Call me if you need any help going through the buying process.

Luke Constantino
Commercial | Residential
REMAX PARK SLOPE
Direct: (212) 300-3919
Lukeconstantino@remax.net
0 votes Thank Flag Link Tue Jul 31, 2012
Infortunately none of us can accurately predict the future....
0 votes Thank Flag Link Tue Jul 31, 2012
One of the reasons FHA increased the mortgage insurance factors is so they could continue to offer 3.5% options. They want to keep it there. I predict it is going to get tougher for awhile, then loosen up. Good luck,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
0 votes Thank Flag Link Tue Jul 31, 2012
The interest rates have been steady, nobody can predict next year but I definitley say you have a great chance, based upon the interest rate being so low for a few years now. Hope my answer was helpful. Wish you the best! Jeannette Batsikas
0 votes Thank Flag Link Tue Jul 31, 2012
The FHA loan program which offers a 3.5% downpayment option shows no sign of going away. There are no pending changes that have been generally advertised. Get with your lender and explain your plans. Ask for immediate notice if a change to the 3.5% program is made.
0 votes Thank Flag Link Tue Jul 31, 2012
I certainly think that by 2013 you will be fine. I don't foresee any significant changes between now and then. There is a good reason the government began guaranteeing the difference between 20% and 3.5%, they wanted to encourage homeownership. Homeowners take more pride in their neighborhood, become involved in local cultural, governmental, sporting and charitable organizations. There is less crime where homeownership rates are higher. And the list goes on and on. Yes, there are a lot of foreclosures around from people that took advantage of 100% financing, which is the reason you don't see much of that these days. Most people need to have at LEAST 3.5% down. But let's remember who really created the housing bubble, it wasn't home buyers, it was the banks and their lackadaisical underwriting practices, it was not just zero money down but 'no doc' and 'stated income' and 'negative amortization' loans.

I fully expected and we have in fact SEEN all those creative loans go by the wayside, as they should have. We have ALMOST seem the end of zero money down loans, there are still a few but they are rare. However, I think 3.5%, and certainly 5% down will be here for quite some time.
0 votes Thank Flag Link Tue Jul 31, 2012
Predictions are very difficult; especially about the future.
0 votes Thank Flag Link Tue Jul 31, 2012
I must be getting old because I am going to sound like my father; I remember when banks required 20-25% down on a home. The reason they want 20-25% down follows: when a home is built it usually has about 75-80% labor and materials the other 20-25% are fees & profits; banks know this and don’t want to finance fees & profits (or rebates, new cars, boats, certain types of upgrades beyond standard & appliances) The banks want and demand collateral or skin in the game! The 20-25% fees and profits generally consist of city permits, builder profit, developer profit, real estate fees, bank fees & title company fees. Although these are cost associated with building a home they are not hard cost in construction therefore these fees do not reflect much value or collateral with the bank. Hence the old rule of loaning 75-80% on a property. Only our government in its wisdom has decided to “give” people 100% financing on home purchases. If you were to look at foreclosure statics there are a VERY small percentage of homes in foreclosure where individuals put down a 25% down payment! So in answer to your question of how long do you think banks will continue to take 3.5% down the answer is never! The real answer is how long our government will continue this practice!
0 votes Thank Flag Link Tue Jul 31, 2012
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