Here’s one of the most common questions we receive in our new home buyer classes and we have a few answers for you. I’ll explore a couple of scenarios with you in this article and share what might be a couple of good options for most people.
Common myth: You must have at least a 20% down payment of the purchase price to buy a home. False!
Truth: There are a variety of programs available in Washington State and locally including the option for an ‘FHA’ loan which requires a 3.5% down payment typically. Or maybe you’ll qualify for ‘down payment assistance with a particular city or other programs. There was one client I had that qualified for $40,000 of down payment assistance on a $385,000 purchase price.
Many people in the Seattle area qualify with a 5% or 10% down payment ‘Conventional’ loan that has better benefits to you typically and can sometimes position you better within a multiple offer situation or competitive market. The higher ‘conforming loan’ options are available since King County has been deemed in the top tier for these allowances, and your mortgage lender will have the best-updated amount available.
As you see, there are a variety of options to explore. It’s simply about having the education, which many people forgo by merely talking with friends instead of enlisting a professional and talking with an experienced agent. Ask yourself this: If you were going to purchase a new coat you’d probably do a bit of research first. You’d probably look both online and try on coats at multiple stores until you found something that looked right and fit your budget (and that’s just for a coat!). Yet we find time and time again new home buyers fail to take the correct steps in learning the essentials of purchasing a home while knowing all the things to watch out for, how to best navigate an action plan, and many more things.