The Real Estate White Board with Tyler Harman - "Down Payments"
Welcome to the latest edition of the Real Estate Whiteboard. Today we are going to talk about down payments.
But first I want to talk about prices for a second. They are not getting any cheaper. In fact, they continue to go up. They are going to continue to do that for a few years. So it's time to get in the game and off the bench.
If you think about it this way. As a buyer, they are "prices" and every single day the prices get higher and more expensive. But as an owner, they are "values", and you get to watch your value appreciate and build wealth over time without you doing anything. Doesn't that sound a lot better?
Also, you're renting right now. What do you think is going to happen with rents? do you think they're going to go down? or at least stay the same? They're high already, they're not going to get any cheaper. If you think they're expensive now, just wait to see what they look like 5 year or 10 years from now. Why wouldn't they go up?
It's time to buy a home. Let's talk about down payments.
First of all, the main down payment you hear about, is the 20% down payment. In L.A., that's a lot of money. If you're trying to buy a $500,000 home, that's $100,000 for the down payment. If you're trying to buy a million dollar home, that's $200,000. That's a lot of money.
Some people have it. Some people have been saving for their down payment for years and years. Some people have their family helping them with the down payment. If they have people to help them, then God Bless. If you have the 20% go for it.
But, if you're sitting on the sidelines and saving for the 20% and that's the only thing stopping you from buying. It's time to buy now. You have options.
10%. If you have 10%, you can get a fantastic loan. There are programs out there called 80/10/10 loans. I do them all the time. They have great interest rates, and no mortgage insurance.
5%. If you don't have 10%, you can get another really great loan with only 5% down. There are a few different programs with this kind of down payment. There are loans where you put down 5%, and there's just one big loan, or there are others similar to the 80/10/10 loan where they break it into two smaller loans (80/15/5) to avoid the mortgage insurance.
Speaking of, when you hear people talking about mortgage insurance, it's not the worst thing in the world. It's really not. It serves a great purpose. In fact, I might do another video on mortgage insurance (PMI) later on.
There are other loans out there with 3% and 3.5% down. One of those is the FHA loan. Everyone knows about the FHA loan. It's great, and really flexible. A lot of people can get help with this loan.
There's also the Fannie Mae 3% loan which is really cool. Actually I like this one better. There are a few things we can tweak behind the scenes to keep the payment a little lower so you can afford a little more. These are both really great loans if you only have a small down payment.
What if you have no down payment at all, is that the end for you? No. You can actually get a grant to buy a home. There are lenders that work with the City, State, Country and they have programs where they will give you 5% for a down payment to buy a home. How awesome is that?
There will be a few hoops you have to jump through, but that's all part of the home buying process, so you just need to get used to jumping through hoops.
Even better, there are other loans where you don't need a down payment at all. They will just do the whole loan for you. It's called 100% financing. 0% down. You have to go through classes, they have to make sure you're serious about this, but you can do it.
There are options out there. That's what I want you to know today. There are options to buy a home. Today, you don't have the Down Payment excuse anymore. I'm sorry, I ruined it!
If you really want to buy something, there are options. And, you don't need to know all the options, you just need to know me. But I need you to reach out to me ; otherwise I can't help you. Reach out to me, and I can get you in touch with my guys and get moving.
There's more to it than just the down payment, but that's the start. I want you to know that there are options for you. You can buy a home. What would you buy? I want you to think about that. And then I want you to reach out to me.