From Marc Stiles and the Puget Sound Business Journal:
“A new report by a company called Apartment List found that Seattle millennials think that to buy a starter condominium they would need $41,720 for the standard down payment of 20 percent. In reality, they would need nearly $61,400 for the down payment on a condo in the Puget Sound region, where the median price is $306,900.”
Leah Zamir with Guild Mortgage in Seattle says, “Let me be clear…this is simply not true. You do not need $61,400 to purchase a condo. Now, if you’re trying to avoid paying mortgage insurance, sure, you would need $61,400 + another $6,000 or so for closing costs and prepaid taxes/homeowners insurance to hit that magical 20% equity mark where you don’t have to pay mortgage insurance. However, there are loan programs offered through Washington State that offer down payment assistance to borrowers covering ALL of a borrowers down payment, leaving millennials only needing enough money to cover closing costs (and even then, those can be covered by the seller if the buyer is lucky). So now we’re left with whether or not it’s prudent to save enough to get out of mortgage insurance, or buy the house/condo sooner, but pay mortgage insurance. Well, let me just insert a slide from one of my home buyer classes here:
In the end, Marc isn’t incorrect in his calculations; I just wish the amazing loan programs that allow buyers to get into homes sooner than they might think, and therefore allow them to take advantage of our incredible real estate market were more widely known. ”
Please, if you or someone you know would like to own a home but doesn’t think they A) Have enough for down payment, or B) Their credit isn’t good enough, or C) Their income isn’t high enough – Please have them contact me and I will send you to a few lenders to explain this in more detail. There are great programs out there guys!
To read the full article by Marc Stiles: http://www.bizjournals.com/seattle/news/2017/05/26/seattle-millennials-want-to-buy-house.html